Supply Chain Management

What is the meaning of supply chain management?
Supply chain management (SCM) is the optimization of a product’s creation and flow from raw material sourcing to production, logistics and delivery to the final customer.

What are the 5 basic steps of supply chain management?
Supply management is made up of five areas: supply planning, production planning, inventory planning, capacity planning, and distribution planning.

Supply Chain Management Activities
Supply chain management is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-performing business model. It includes all of the logistics management activities noted above, as well as manufacturing operations, and it drives coordination of processes and activities with and across marketing, sales, product design, finance, and information technology.

What are the 7 supply chain functions?
The functions of a supply chain include product development, marketing, operations, distribution, finance, and customer service. Today, many supply chains are global in scale. Effective supply chain management results in lower costs and a faster production cycle.

Logistics Management
Logistics management is that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers’ requirements.

Logistics Management Activities
Logistics management activities typically include inbound and outbound transportation management, fleet management, warehousing, materials handling, order fulfillment, logistics network design, inventory management, supply/demand planning, and management of third party logistics services providers. To varying degrees, the logistics function also includes sourcing and procurement, production planning and scheduling, packaging and assembly, and customer service. It is involved in all levels of planning and execution–strategic, operational and tactical. Logistics management is an integrating function, which coordinates and optimizes all logistics activities, as well as integrates logistics activities with other functions including marketing, sales manufacturing, finance, and information technology.

Benefits of supply chain management

When executed well, supply chain management provides numerous benefits to companies. Effective supply chain management helps to improve customer service, can reduce operating costs through inventory optimization, streamline fulfillment, improve resource management and more. Because more efficient product delivery means that invoicing — and subsequently payment — happens sooner, companies that implement good supply chain management practices also benefit from improved cash flow.