The impact of supply chain management approach on cost

Either it is a manufacturing, trading or service firm, all the business that has outcomes should make the activity of supply. For this reason, the function of supply is the most basic and strategic function of businesses. The function of supply has the responsibility of supplying the inputs with optimum price, quality and quantity at the right time. But although its? strategic importance, the function of procurement is not placed in our business literature and at businesses as a free function.Supply chain management requires integrity of supply, purchasing, production, marketing and logistics activities and requires maintainig the conformity of activities conducted by the member organizations of the chain. Furthermore, supply chain managemet is a multidimensional management mentality which takes the suppliers into consideration as a strategic shareholder and develops relations within this frame and changes the organizational and management structure. It is very difficult to reduce costs without measuring and analyzing. Classifying the costs and revenue components within the framework of supply chain management is crucial in that it helps pinpoint the items to improve in cost reduction and revenue generation.In this study, the cost and the revenue components of a manufacturing firm were evaluated on the base of a classification and accordingly the effects of supply chain management implementations on cost were determined.