Abstract: Supply chain management,closely correlated with logistics,allows firms to effectively cooperate with their partners,gaining collective competitive advantages in the changing markets.This paper begins with discussing the concepts of logistics and supply chain management,and their intrinsic relationships.It is argued that sophisticated coordination of material and information flows is the kernel of supply chain management.The operational coordination decisions on material flows mainly concern with inventory replenishments and transportation routing.The strategic decisions controlling material flows mainly concern with facility locations.Information flow management integrates business applications across both department borders and company boundaries.Dynamic alliances synchronize activities in many companies,strategically configuring material and information flows in the supply chain.This paper identifies the obstacles in managing the flows and further indicates the promising approaches to break through these obstacles.

Key words: supply chain management, logistics, facility location, strategic alliance, integration.