Now, let’s move on to the definition of ‘Supply Chain Management’, SCM for short.
Supply chain management is the management of the flow of goods and services including all processes involved in transforming raw materials into final products.
It involves the active streamlining of a business’s supply-side activities to maximize customer value and gain a competitive advantage in the marketplace.
So, how does supply chain management actually work?
Typically, supply chain management attempts to control or link the production, shipment, and distribution of a product and by managing the supply chain efficiently, companies can benefit from reduced overall operational costs.
It is usually done by staying in control of internal inventories, internal production, distribution, sales, and the inventories of company vendors.
In SCM, the supply chain manager is the key person who is responsible for logistical coordination of all aspects of the supply chain that are made up of five parts:
- Supply Chain Plans and Strategies
- Sourcing of Raw Materials or Services
- Logistics and Delivery
- Return Processes for Defective Products
As a supply chain manager, your role is to try to minimize shortages while keeping costs as low as possible and provide recommendations on how to improve productivity, quality, and operational efficiency.