Supply-chain management is the use of computers to oversee all stages of production, including materials procurement, manufacturing, marketing and inventory. A computer network connects the head office, factories and marketing outlets, enabling them to share information. The system also allows companies to quickly adjust output and inventory levels in response to changing demand. Many U.S. and European firms are adopting supply-chain management to increase efficiency. In Japan, the personal computer, consumer electronics, household goods and apparel industries commonly use the system. For example, PC makers use a point-of-sales (POS) system to conduct weekly sales surveys, enabling them to reduce output immediately when sales slow. A large portion of corporate capital investment in information technology is used to set up supply-chain management systems.
The procurement, stocking and distribution of components, subassemblies and products throughout the design, manufacturing, and distribution stages, ensuring that the correct components, subassemblies and products are delivered to their appropriate destination at the proper time, the lowest overall cost, and acceptable quality levels.
The use of information technology to endow automated intelligence to an ever-growing network of cash registers, delivery vehicles, distribution centres, factories, and raw material suppliers.