Suplly Chain Management and Virtual Organization

Success of the contemporary enterprises (also) depends a lot on their capacity to manage all important supply chains in which they are involved. For that reason the enterprises must rethink and innovate their management (in general) and especially the management of supply chains. Supply chain management can be defined as “managing the entire chain of raw material supply, manufacture, assembly and distribution to the end customer”. One of the main decisions of interest in supply chain management is how much of the supply chain should be owned by each business. But in the modern environment vertical integrations alone are not enough. The alternative to vertical integration is some other form of relationship, not necessarily ownership. The relationship between the links of the supply chain will be examined in more details in terms of the flows between the operations involved. These flows may be of transformed resources such as materials or of transforming resources such as people or equipment (e.g. like hierarchy, contractings, trading commitments etc.). For their formation, performance and working we can use different organizational concepts, which vary in the span from classic organization to virtual organization. At the same time each organizational concept can be supported (also) with different organizational structures, as for example virtual organization. From the viewpoint of supply chain management, virtual organization can be discussed as a concept of operating and/or organizational structure of operating. This contribution discusses two theses: 1) How traditional and virtual concepts of organization (as two extremes) encouragement supply chain management and 2) How virtual organizational structure supports operating of supply chain management.