Supply chains have eliminated U.S. manufacturing jobs but created many new jobs coordinating supply chain efforts.supply chain management

Cliff Welborn

English

Research Papers in Economics

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SUPPLY CHAIN MANAGo you buy bread, magazines, or
shoes; own a car, refrigerator, or tele-
phone; use gasoline, toothpaste, or
aspirin? If you answered yes, you
have experience with supply chains. A supply
chain is the collection of people and companies
that work together to make products and serv-
ices available to consumers. Supply chain man-
agement is a topic that has received much
attention recently. While many specific indus-
tries are experiencing reductions and downsiz-
ing, supply chain management is a rapidly
growing field. All products reach the end cus-
tomer through some type of supply chain: it
may be relatively simple with a few companies
performing all of the steps to complete a prod-
uct, or it may be a complex series of relation-
ships between several different organizations
located across the entire globe. Supply chain
management refers to the coordination between
different organizations to acquire raw materials,
transform them into finished goods, and deliver
products to customers. Like all organizations,
supply chains are made up of people. The peo-
ple in a supply chain are responsible for per-
forming many different activities.  
As the name implies, a supply chain has
some similarities to a physical chain. Different
organizations in the chain represent individual
links. When one link in a physical chain fails, the
entire chain fails. The same is true in a supply
chain: if one organization fails to perform its
tasks, the entire supply chain will fail. In the past,
many companies wanted to operate under a strat-
egy known as vertical integration. They wanted
to own and control all of the functions necessary
to bring a product to its finished state and not
rely on other companies to perform work on their
products. An alternate strategy is for a company
to focus on its core competency: the thing the
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GEMENT OVERVIEW
Supply chains have 
eliminated U.S. manufacturing
jobs but created many new jobs 
coordinating supply chain efforts.
by Cliff Welborn



company is best at doing. In a modern supply
chain, different companies work together, each
performing only its core competency to complete
a task. Core competencies might include plan-
ning and coordinating activities, finding and
selecting supply chain members, making prod-
ucts, and transporting products to supply chain
members and customers. When each member of
a supply chain performs only the activities it is
good at, the overall supply chain becomes more
efficient than a single company trying to perform
all necessary functions on its own.
Supply chains have many different sizes and
configurations; Figure 1 depicts a common
arrangement. Each stage represents individuals
who perform their particular job function. Career
choices within the supply chain management
field are as diverse as the industries involved.
Some members of a supply chain are
responsible for planning activities and commu-
nicating the plans to supply chain partners. Oth-
ers are responsible for acquiring the raw
materials (metal ores, crops, livestock, etc.) that
will be used to produce products. Some partners
are responsible for converting raw materials into
finished goods. These manufacturing jobs are
found in workplaces ranging from small shops
with just a few workers to giant factories with
thousands of employees. Manufactured products
are often sent to warehouses before they are
taken to their final retail destinations. In ware-
houses, employees manage the unloading, stor-
age, and loading of inventory. From warehouses,
products are sent to retail locations where con-
sumers purchase them. Throughout the entire
chain are people involved with the distribution
of products from one stage to the next. Distribu-
tion employees transport products from one
location to another. 
Supply chain management seeks to find the
best organization to perform each task required
to transform a product from conceptual design
through raw material to finished consumer item.
Global supply chain management not only con-
siders the best domestic source but also the best
source worldwide to perform a task. While this
approach has decreased the number of manu-
facturing jobs in the U.S., it has created many
new jobs related to coordinating supply chain
members’ efforts and transporting and distribut-
ing products. Today, many companies special-
ize in providing logistics and distribution
support services, which include such activities
as analyzing data, warehousing products, and
transporting goods from location to location. 
Much supply chain management focuses on
distribution or logistics functions. The products
of a supply chain must be physically moved from
one location to another to allow each specialized
link to perform its task. Coordinating the supply
chain efforts and making sure transportation is
efficient are major objectives. Computer systems
are often used to help analyze data used in mak-
ing logistics decisions such as who should per-
form each task, when a task should begin, how
much material is needed, and what is the best
transportation method (plane, boat, train, truck).
Many logistics and distribution firms
choose to locate in Tennessee due to our trans-
portation infrastructure (roads, rail systems,
interstates, and airports) and proximity to a
major portion of the U.S. population. There are
more people within a six-hour drive of
Nashville than anywhere in the country. Fifty
percent of the U.S. population lives within 600
miles of Nashville. Tennessee has 1,105 miles
of interstate system. Nashville is one of only
four U.S. cities to have six legs of interstates
converging within its limits. Tennessee’s inter-
states include I-40 east-west from Memphis to
Knoxville; I-65 north-south through Nashville;
I-24 east-west through Nashville; I-75 north
from Chattanooga to Jellico; I-55 north-south
through Shelby County; and I-81 from near
Knoxville to Bristol. In addition, Tennessee has
six major rail lines operating on 2,340 miles of
track and 888 miles of navigable river channels.
Tennessee has six commercial and 75 general
aviation airports. Air cargo carriers operate
from Chattanooga, Knoxville, Memphis,
Nashville, and Tri-Cities Regional airports.
Annually, $287 billion in goods are shipped
from sites in Tennessee and $200 billion in
goods are shipped to sites in Tennessee using a
combination of plane, boat, train, and truck car-
riers. This complex distribution network
requires a skilled workforce to support its plan-
ning, storage, and transportation activities.
Ultimately, a supply chain is a team of peo-
ple working together to satisfy a customer’s
needs. Members have new business titles but
perform the basic business functions that have
existed for years. What makes the modern supply
chain different from previous operations is the
growing trend toward globalization. Today’s
world-class supply chain knows no geographical
boundaries. Partners are selected based on their
ability to perform needed activities. The goal is
to design the most efficient and effective supply
chain and benefit the end customer. Tennessee
companies become supply chain partners by con-
tributing their core competencies. This brings a
new type of job growth to the state and makes
consumer products available in the most efficient
manner possible. 
Cliff Welborn is an assistant professor of man-
agement and marketing at MTSU.
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Planning and
Communicating
Acquiring Raw Materials
Manufacturing Products
Warehousing Goods
Selling to Customers
Figure 1.
Supply Chain
Activities

Supply Chain Management Overview: A Global Team Effort

http://www.mtsu.edu/~berc/tnbiz/supply/welborn.pdf

Supply Chain Management Overview: A Global Team Effort

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