Supply Chain Management

What Is Supply Chain Management (SCM)?

Supply chain management is the management of goods and services, which comprises of the flow of products, control of costs and procurement policies which drive the purchases required for the operations. These processes include transformation of RAW materials to finished goods, Buy-outs driven by the job and stock management.

The process of Supply Chain Management, also drives the procurement policies of the business, with this ethos you are able to get great value for money and gain a competitive advantage of rival businesses in your industry.

Function of Supply Chain Management

SCM involves five main functions, aligning flows, integrating functions, coordinating processes, designing complex systems and managing resources.

A SCM workflow environment

With a supply chain, you literally have a central control from acquiring the job to project management of that job. This means you acquire a job that needs goods or services, with your established supply chain, you will be able to cut costs and deliver goods faster to your customer with high quality of delivery.

SCM is based on the idea that most products produced comprises of many units of businesses to make up the supply chain.

The supply chain is nowadays considered a value-add operation to the business

What are the main aspects of SCM

Planning and Strategy
Sourcing of materials and services
Logistics
Quality Rework procedure
Procurement Policies

A great Example of Supply Chain Management

An example of SCM, the company can anticipate receiving multiple orders for certain products, the operation can then forecast correctly how much product they require and the delivery times needed to fulfill the customer needs. This could include manufacturing the product and or deploying the product to the customer.

Using the SCM process, the operation can reduce excess inventory and all the inventories associated costs, such a storage, freight cost and insurance