What is Supply Chain Management (SCM) and It’s Importance?

The Supply Chain Management (SCM) is a group of activities needed to plan, control and execute a product’s flow. The term is indeed comprehensive and includes all the processes that transform the raw materials into the final product. To acquire maximized customer values and competitive advantages, these activities include dynamic streamlining.

SCM focuses on providing effort to develop efficient and economical supply chains. From production to product development everything gets covered under the process. The areas which have a large demand, planning, management, storage, and transportation are taken care of. The process firmly believes in the use of required resources like strong business strategy and supporting software.

BREAKING DOWN THE DEFINITION OF SUPPLY CHAIN MANAGEMENT:

SCM or Supply chain management is the centrally sited system that comprises every activity related to a product. Taken from the planning and production to manufacturing and distribution; the system cuts the cost in every segment. Thus the profitability of an organization is noticed insatiably.

The importance of Supply Chain Management is that it keeps tight control in internal affairs, production, distribution, sales, etc. The idea of Supply chain is a mixed product of the effort given by a various organization that comes to market results. The concept of Supply chain exists since ages in the market, but recently the companies have paid attention towards implementing the idea.

WHAT IS SCM?

The term Supply Chain stands for a network that combines organizations, individuals, resources, activities, and technologies, which are involved in the production of a service or good. Delivering the raw materials from supplier to manufacturer is the initial stage of the supply chain. The supply chain ends where the delivery of the product or the service finishes. The supply chain management overlooks every factor that is connected to the company’s product or service. Supply chain management adds values and increases company revenues.

The production cost can be decreased if the Supply chain management principles are appropriately implemented.

Types of Supply Chain Management

A simple supply chain management system is made of a company, the customers and the suppliers related to the company. The simple chain will look like:

A complex supply chain is more likely to add more suppliers, suppliers of suppliers, customers, customers of customers, etc. There can be more involvement of third-party providers, other financial organizations, marketers, and researchers. A complex supply chain can arise as many problems as it can. The complexity also hints relatable risk in demand management.

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THE SUPPLY CHAIN MANAGEMENT COURSE:

Supply chain management Course includes teaching a vast action list. The action needed is followed by significant effort, time, money and most importantly expertise. The principle objectives of a Supply Chain Management Certification are to building the relationship, setting goals, creating strategies, developing roles and peoples, implementing new technologies, etc. The overall purposes look like:

  • Achieving effective fulfilment
  • Enhancing the responsiveness of an organization
  • Driving customer values
  • Helping financial successes
  • Building new network etc.

THE IMPORTANCE OF SCM:

The SCM has manifold benefits including

  • Raising Profits
  • Creating efficiencies
  • Lowering costs
  • Boosting collaboration
  • Fastening the delivery period.

The companies which are lacking to manage demand in better ways or are dealing with disruptions; a right SCM can help the organization to get customer satisfaction in every way possible. The benefits of the supply chain are achieved through by either sketching appropriate strategies or taking help of software to manage the complexity of today’s market.

SCM AND LOGISTIC:

Most of the people are tend to misunderstand both the terms. Supply Chain Management at times is considered to be as equal as logistic. There is nothing to deny that logistics is a very important component of SCM. But, it is not entirely the same activity. Here are the noticeable differences between SCM certification and logistic:

Supply Chain ManagementLogistic
It manages the activities like strategic planning, managing demand, cutting cost, increase production rate etc.It manages activities like packaging, warehousing, distributing, transporting and delivering.
It focuses on uplifting the overall profitability of an organization.It focuses on moving a product from one place to another.
It links the major business processes, taken from raw material to the final product.It lies within the same supply chain and links all delivery related activities only.
SCM training is a comparatively new termThe use of logistic is quiet incumbent as of now.