Supply Chain Management (SCM)

In simple terms supply chain management can be defined as the movement of goods and services from one place to another through various modes of transport such as air,sea,land etc. Let us learn some more useful information about SCM !

A supply chain is the connected network of individuals, organizations, resources, activities, and technologies involved in the manufacture and sale of a product or service. A supply chain starts with the delivery of raw materials from a supplier to a manufacturer and ends with the delivery of the finished product or service to the end consumer.

The concept of Supply Chain Management (SCM) is based on two core ideas: 
  1. Every product that reaches an end user represents the cumulative effort of multiple organizations. These organizations are referred to collectively as the supply chain.
  2. While supply chains have existed for a long time, most organizations have only paid attention to what was happening within their “four walls.” Few businesses understood, much less managed, the entire chain of activities that ultimately delivered products to the final customer. 
Technology is critical in managing today's supply chains, and every major supply chain management process has a software category dedicated to it. Most vendors of ERP suites offer supply chain management software, and there are thousands of niche vendors.Commonly used SCM modules include the following:
  • transportation management system (TMS) for managing the transport and storage of goods, especially across global supply chains;
  • a warehouse management system (WMS) for all of the activities inside warehouses and distribution centers; and
  • an order management system, to handle processing of customer orders through WMS, ERP and TMS systems, at all stages of the supply chain. 

The most basic version of a supply chain includes a company, its suppliers and the customers of that company. The chain could look like this: raw material producer, manufacturer, distributor, retailer and retail customer.

A more complex, or extended, supply chain will likely include a number of suppliers and suppliers' suppliers; a number of customers and customers' customers, or final customers; and all the organizations that offer the services required to effectively get products to customers, including third party logistics providers (3PLs), financial organizations, supply chain software vendors and marketing research providers. These entities also use services from other providers.

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