Supply Chain Management

Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer.

Supply chain management involves coordinating and integrating these flows both within and among companies.

SCM helps a company get the right products to the right place at the right time, in the proper quantity and at an acceptable cost

Supply chain management (SCM) is the process of planning, implementing, and controlling the operations of the supply chain as efficiently as possible.

Supply Chain Management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption.

Supply Chain Management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management activities.

Importantly, it also includes coordination and collaboration with channel partners, who can be suppliers, intermediaries, third-party service providers, and customers.

In essence, Supply Chain Management integrates supply and demand management within and across companies.

Supply chain management is a cross-functional approach to managing the movement of raw materials into an organization, certain aspects of the internal processing of materials into finished goods, and then the movement of finished goods out of the organization toward the end-consumer

A supply chain not only includes the manufacturer and supplier but also transporters, warehouse, retailers, and customers themselves.

Those present in the chain will be there due to specific role in fulfilling the customer expectations.

SCM process begins with the concept of the product and ends with delivery of goods or services in the market.

The goal of SCM is to create a fast, efficient, and low-cost network of business relationships to get a company’s products from concept to market.

Supply chain management flows can be divided into three main flows

1)    Product Flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs.

2)    Information Flow involves transmitting knowledge and updating the status of delivery at any point of time (purchase orders, delivary challans)

3)    Financial Flow or funds flow consists of credit terms, payment schedules, and consignment and title ownership arrangements.

The Purpose of supply chain management is to improve trust and collaboration among supply chain partners, thus improving inventory visibility and improving inventory velocity.

There are two main types of SCM software

Planning Applications use advanced algorithms to determine the best way to fill/deliver an order.

Execution Applications track the physical status of goods, the management of materials, and financial information involving all parties. Some SCM applications are based on open data models that support the sharing of data both inside and outside the enterprise (this is called the extended enterprise, and includes key suppliers, manufacturers, and end customers of a specific company). This shared data may reside in diverse database systems, or data warehouses, at several different sites and companies.