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As the name suggests Supply chain management (SCM) is the management of the flow of goods. Goods Management includes the storage of raw materials, inventory work-in-progress and finished goods from source to destination (point of consumption). A complex interlinked network is involved to manage the supply chain. It is a much broader concept than just managing the goods. SCM concerns with multiple phases including design, planning, execution, control, and monitoring of supply chain activities.
Primary objective of SCM is to build a competitive infrastructure and to create a net value. Moreover, it also includes leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally. Concept of SCM can also be viewed as the systematic and planned coordination of the business functions within an organization and across companies involved within the supply chain.
There are three concepts in Supply Chain Management that are interconnected tightly and useful in writing SCM assignment solutions. These three concepts are Network Structure, Business Processes and Management
The problems addressed by Supply Chain Management: Distribution Network configuration is the first problem that is addressed by SCM. As we know there are multiple entities related to the complete supply chain management network, such as customer, distribution centers, cross-docks, warehouse and production facilities, etc. After the identification of this problem second issue to address, is the distribution strategy. Under the distribution strategy, we answer questions, such as Scheme of delivery (closed shipping, cross dock, etc.) and mode of transportation (railroad, parcel, motor carrier, etc.). All these activities should be well coordinated to achieve the lowest total logistics cost. A significant cost increase can be seen it only one of the activity is optimized. Planning of logistics activities, therefore, should be planned and consistent. A fourth important problem that is addressed by SCM is Inventory Management. Last is the cash flow, which handles the payment arrangement payment terms and exchange of funds.
Successful SCM requires a change from managing individual functions to integrating activities into key supply chain processes. In an example scenario, a purchasing department places orders as its requirements become known. The marketing department, responding to customer demand, communicates with several distributors and retailers as it attempts to determine ways to satisfy this demand. The information shared between supply chains partners can only be fully leveraged through process integration. The key supply chain processes stated by Lambert (2004) are:
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