WHAT IS SUPPLY CHAIN MANAGEMENT?

Getting to know what supply chain management is will help you make an informed decision about whether or not outsourcing some of your supply chain is in your best interests.

WHAT IS SUPPLY CHAIN MANAGEMENT?

Supply chain management (SCM) is designed to manage the flow of goods and services from raw materials to your final product. Good supply chain management involves streamlining the business’s supply chains in order to maximize customer value and reduce production costs.

 

More info Supply Chain Report

 

A supply chain manager should work to develop and implement supply chains from product development, to production, to delivery in the most productive and cost effective manner possible.

HOW SUPPLY CHAIN MANAGEMENT WORKS

Supply chain management works to link the production, shipment, and distribution of a product to help cut down on excess costs and to deliver products to consumers faster. This is done by maintaining control of internal inventories, internal production, distribution, sales, and the inventories of vendors.

COMPONENTS OF SUPPLY CHAIN MANAGEMENT

A supply chain manager will coordinate the logistics of all aspects of the supply chain, including:

Planning

Companies have to properly plan and manage all resources to ensure that customer demand for their product or service is being met. This can be done by carefully designing their supply chain and by determining which technology to use to ensure that the supply chain remains efficient and effective.

Sourcing

Companies need to select suppliers to provide the goods and services needed to create their product. The supply chain manager will then need to monitor and manage supplier relationships, including ordering, receiving, managing inventory, and authorizing supplier payments.

Producing

Supply chain managers will need to coordinate the activities required to accept raw materials, manufacture products, test for quality, package for shipping, and schedule for delivery.

Delivering

This involves coordinating customer orders, scheduling delivery, dispatching loads, invoicing customers, and receiving payments. In most cases, companies choose to outsource this part of the supply chain to a logistics provider, especially if the product requires special handling or needs to be delivered to the consumers’ home.

Returning

The supply chain manager will need a responsive and flexible network in order to take back any defective, excess, or unwanted products.