Supply chain management (SCM) is the management of the flow of goods and services from raw materials to final products. It involves the coordination and oversight of various activities involved in the production, distribution, and delivery of products to customers. SCM includes procurement, operations management, logistics, and marketing channels. The goal of SCM is to streamline a businesss supply-side activities to maximize customer value and gain a competitive advantage in the marketplace.
SCM is important because it helps companies cut excess costs and deliver products to the consumer faster and more efficiently. By managing the supply chain, companies can avoid expensive recalls and lawsuits. The five most critical elements of SCM are developing a strategy, sourcing raw materials, production, distribution, and returns. A supply chain manager is responsible for controlling and reducing costs and avoiding disruptions to the supply chain.
SCM activities include the movement and storage of raw materials, work-in-process inventory, finished goods, and end-to-end order. Todays digitally-based SCM systems include material handling and software for all parties involved in product or service creation, order fulfillment, and information tracking. SCM can also extend to the activities around global trade, such as the coordination of international logistics and customs clearance.
