Supply chain management is managing the flow of materials across the supply chain, i. e, form preparing the raw materials to supplying the end product to the consumer ,as well as the related counter flow of information, regarding controlling and recording of materials movement. Supply chain management refers to the managing of materials and products from source to the final users. Some of the activities in this system include: Sourcing; Purchasing; Manufacturing and its related activities of planning and scheduling; Distribution planning and management of warehouses; Inventory management; Inbound and outbound transaction; Linking all these with the customer services and marketing activities. These activities are the same as those of logistics and they illustrate the close relationship between logistics and supply chain management. Most organizations are simultaneously members of a number of supply chains. An organization in a chain purchases materials and services from a number of suppliers, converts them into a range of products that they sell to other organizations. Successful companies use their logistics competence to optimize their operations in managing the materials flow through their companies. But it will no longer be necessary or desirable for each supply chain member organization to only manage its logistics activities on an independent basis. However it is most unlikely for any one company that all the supply chains in the diagram will require formalized supply chain management processes It is a requirement for that organization to focus its supply chain efforts on those networks that are critical to the success of the company. Internal Supply Chains These are portions of the overall supply chains that exist within an individual organization, and they can be quite complex due to organizations which have international and multi-functional businesses. .Your study of logistics has covered these aspects in great detail. External Supply Chains External supply chains are the processes where internal supply chains can be extended to the total network that an organization finds itself in .The parts of the network to be focused upon by an individual company as mentioned above need to be carefully selected to maximize the benefit that working with them will achieve. Benefits of Supply Chain Cooperation All parties working together in a formal supply chain receive a number of benefits from joint working, these are: Establishing valuable contacts across the supply chain; Gaining insights into how other organizations conduct their business, enabling them to improve their own; Identifying opportunities for joint research to improve the outputs of the supply chain. However supply chains do not just happen. It requires a great deal of management effort and cooperation to achieve a successful supply chain. A number of principles need to be followed in order to achieve success and we will be discussing them in more detail in the notes .These seven principles are listed below: Supply chain management begins with the end consumer; Managers must cooperate to manage the total logistics chain; Interface management must be controlled through a single channel; Sales and operations planning must be integrated; Manufacturing and sourcing must be optimized to achieve flexibility and efficiency; Supply chain partners must focus in relationship management; Performance measures must be customer driven.