Supply Chain Management (SCM)

What Is Supply Chain Management ( SCM ) ?

supply chain management is the management of the flow of goods and services and includes all processes that transform raw materials into final examination products. It involves the active streamline of a business ‘s supply-side activities to maximize customer rate and gain a competitive advantage in the marketplace.

Key Takeaways

  • Supply chain management (SCM) is the centralized management of the flow of goods and services and includes all processes that transform raw materials into final products.
  • By managing the supply chain, companies can cut excess costs and deliver products to the consumer faster.
  • Good supply chain management keeps companies out of the headlines and away from expensive recalls and lawsuits. 
  • The five most critical elements of SCM are developing a strategy, sourcing raw materials, production, distribution, and returns.
  • A supply chain manager is tasked with controlling and reducing costs and avoiding supply shortages.


Explaining Supply Chain Management (SCM)

How Supply Chain Management ( SCM ) Works

add chain management ( SCM ) represents an attempt by suppliers to develop and implement provide chains that are as effective and economical as potential. provision chains cover everything from production to intersection development to the information systems needed to direct these undertakings .

typically, SCM attempts to centrally operate or link the production, cargo, and distribution of a product. By managing the issue chain, companies can cut excess costs and deliver products to the consumer fast. This is done by keeping tighter control of internal inventories, internal production, distribution, sales, and the inventories of company vendors .

SCM is based on the estimate that closely every product that comes to grocery store results from the efforts of respective organizations that make up a add chain. Although supply chains have existed for ages, most companies have entirely recently paid attention to them as a value-add to their operations .

5 Parts of SCM

In SCM, the supply chain director coordinates the logistics of all aspects of the supply chain which consists of five parts :

  • The plan or strategy
  • The source (of raw materials or services)
  • Manufacturing (focused on productivity and efficiency)
  • Delivery and logistics
  • The return system (for defective or unwanted products)

The supply chain director tries to minimize shortages and keep costs down. The job is not only about logistics and purchasing stock. According to, provide chain managers “ oversee and manage overall supply chain and logistic operations to maximize efficiency and minimize the price of organization ‘s supply chain. ”

Productivity and efficiency improvements can go straight to the bottomland line of a company. full supply chain management retain companies out of the headlines and off from expensive recalls and lawsuits .

SCM vs. Supply Chains

A supply chain is the network of individuals, companies, resources, activities, and technologies used to make and sell a merchandise or service. A provide chain starts with the manner of speaking of natural materials from a supplier to a manufacturer and ends with the pitch of the finish product or service to the end consumer.

SCM oversees each touchpoint of a company ‘s intersection or military service, from initial initiation to the final sale. With so many places along the supply chain that can add value through efficiencies or lose value through increased expenses, proper SCM can increase revenues, decrease costs, and impact a company ‘s bottomland credit line .

case of SCM

Understanding the importance of SCM to its business, Walgreens Boots Alliance Inc. decided to transform its add chain by investing in engineering to streamline the entire work. For several years the company has been investing and revamping its provide chain management process. Walgreens was able to use big data to help improve its calculate capabilities and better manage the sales and inventory management processes .

This includes the 2019 summation of its first-ever Chief Supply Chain Officer, Colin Nelson. His role is to boost customer gratification as the company increases its digital presence. beyond that, in 2021, it announced it would be offering release two-hour, same-day delivery for 24,000 products in its stores .

What Is a Supply Chain Management Example?

supply chain management is the commit of coordinating the respective activities necessary to produce and deliver goods and services to a business ’ south customers. Examples of supply chain activities can include design, farm, fabricate, packaging, or transport .

Why Is Supply Chain Management Important?

issue chain management is authoritative because it can help achieve several business objectives. For case, controlling fabrication processes can improve intersection quality, reducing the risk of recalls and lawsuits while helping to build a strong consumer stigmatize. At the same time, controls over ship procedures can improve customer overhaul by avoiding costly shortages or periods of inventory flood. overall, issue chain management provides several opportunities for companies to improve their profit margins and is specially important for companies with big and international operations .

How Are Ethics and Supply Chain Management Related?

Ethics has become an increasingly important expression of provide range management, therefore much so that a fix of principles called provision chain ethics was born. Consumers and investors are invested in how companies produce their products, treat their work force, and protect the environment. As a result, companies respond by instituting measures to reduce waste, improve working conditions, and lessen the affect on the environment .

What Are the 5 Elements of Supply Chain Management?

provide chain management has five key elements—planning, sourcing raw materials, manufacture, rescue, and returns. The plan phase refers to developing an overall scheme for the supply chain, while the other four elements specialize in the cardinal requirements for executing that plan. Companies must develop expertness in all five elements to have an effective supply chain and avoid expensive bottlenecks.

What Element of the Marketing Mix Deals With Supply Chain Management?

put is the selling mix element that deals with issue chain management as it involves the processes that take goods and services from their raw beginnings to the ultimate destination—the customer .

source :
Category : Finance

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