The supply chain management or SCM is defined as the management of the goods’ flow. This process involves the movement as well as the storage of all raw materials, the work-in-process inventory, and also the finished products from the point of source to the point of use. Interlinked or interconnected networks, node businesses and channels are included in the stipulation of services and products needed by end consumers inside the supply chain.
SCM system can be defined as the design, preparation, completion and control and checking of the supply chain activities with a goal of making net value, forming a competent infrastructure, synchronizing the supply with demand, leveraging global logistics, and gauging performance internationally.
Supply chain management draws a lot from the areas of logistics, operations management, procurement, including the information technology. It then struggles for the integrated approach. SCM is the cross-functional approach which involves managing the raw materials’ movement into a company, some elements of the interior processing of the needed materials into end products and the move of finished products outside of the company towards the end consumers.
While the organization struggles to concentrate on major competencies and is turning to be more flexible, it reduces its ownership of the sources of raw materials and the distribution channels. Such functions are progressively more being outsourced to the other firms which could carry out the activities in a more cost effective and better way. The impact is to boost the number of companies involved in fulfilling the demand of customers whilst reducing the administrative control of every day logistics operations. Less control with more partners in supply chain results to the formation of the concept of SCM. The rationale of supply chain management is improving the collaboration and trust among all supply chain associates, thereby enhancing visibility as well as the quickness of the inventory movement.
Supply chain management or SCM software includes the modules or tools that are used in the implementation of supply chain transactions, handle supplier relationships as well as control related business processes. SCEM or supply chain event management considers every possible event and factor which could disrupt the supply chain. With this, probable scenarios could be formed and the solutions will be devised. While the functionality in this system can be usually broad, it typically involves the following:
- Customer requisite processing
- Purchase order processing
- Management of the inventory
- Good receipt & warehouse management
- Supplier management or sourcing
A requirement of most SCM systems generally involves forecasting. It frequently involves integration technology which permits the organizations to deal electronically with the supply chain associates.
The Benefits of SCM System
- Through adding an efficient SCM system to a certain business, the integrated international efficiency could result to reduced costs of the needed raw materials.
- A SCM system that has been wired into the advanced software will let you know the position of all your unprocessed materials and finished products are in by monitoring your distributors and suppliers.
- A SCM system can improve the cycle times and it makes sure that raw materials are available if your business is in need of them so the production will never stop.
- A SCM system allows your company to efficiently cope with issues at either part of the production range.