SupplySupplies Chain Management and Distribution ChannelsDistribution channels

Supply chain management (SCM) is about relationships and links between supply chain partners and networks. Integration is the key to collectively achieve goals and the most efficient process (Kotler and Armstrong 2018). Supply chains consist of individual entities and networks across countries, which are also managed to pursue individual organization revenue goals. Interplay of two cultural orientations is therefore bound to exist naturally in managing supply chains, collective culture and individualistic culture. The design and effectiveness of a supply chain is therefore for revenue streams of companies. Figure 5.1 depicts the supply chain with the upstream (supply side), operations (production of goods or services) and downstream elements (demand side). Upstream partners include raw material suppliers, components, parts, information, finances and expertise to create a product or service Downstream partners include the marketing channels or distribution channels that look towards the customer. Supply chain “make and sell” view includes the firm’s raw materials, productive inputs and factory capacity. Demand chain “sense and respond” view suggests that planning starts with the needs of the target customer, and the firm responds to these needs by organizing a chain of resources and activities with the goal of creating customer value. Value delivery network is the firm’s suppliers, distributors and ultimately customers who partner with each other to improve the performance of the entire system. Intermediaries offer producers greater efficiency in making goods available to target markets. Through their contacts, experience, specialization and scale of operations, intermediaries usually offer the firm more than it can achieve on its own. From an economic view, intermediaries transform the assortment of products into assortments wanted by consumers. Channel members add value by bridging the major time, place and possession gaps that separate goods and services from those who would use them.