1. What is Supply Chain Management?
Supply chain management or SCM as it is generally referred to as, comprises of all those activities ranging from the planning, controlling and executing any product’s flow. It includes the sourcing and acquiring of the raw materials to its production and distribution to its end customers. All of this is done with the focus on keeping the cost at the minimum possible.
Read more about Supply Chain Management Techniques, Ratio & Formulas.
2. What are the main elements of Supply Chain Management?
i. SCM deals primarily with optimizing the flow of materials and data and finances in the process of planning, sourcing, acquiring, producing, managing the inventory, storing, transportation of products.
ii. It is an integrated planning model that executes these steps based on demand and also handles the exchange and returns of the defective and excess goods delivered.
iii. This process involves the inclusion of both complex business strategies and specialized software in order to leverage opportunities in the market and gain competitive advantage.
3. Who are the main players in Supply Chain Management?
Owing to the complexity of this process, the working of SCM relies on the various parties that work as a cohesive unit to deliver cost-effective solutions. These include the suppliers and manufacturers and people handling the changes, collaboration, communication and the management of risk in the chain.
4. What are the responsibilities of Supply Chain Management?
SCM covers everything in the domain pertaining to social, legal and environmental concerns. The procurement has to meet sustainable standards, keeping in mind the code of corporate social responsibility, ensuring the impact of the company’s activities do not hinder social and environmental well-being.
5. Why is Supply Chain Management required?
SCM helps raise efficiency and in turn, increases profits by lowering costs and boosts collaboration by aligning communication and contact between various entities.
Companies are better managed with regards to having the appropriate amount of inventory, meeting customer demands, keeping cost to a minimum and delivering in the most effective manner.
6. Some of the major benefits of incorporating SCM in your business include:
i. SCM helps improve the profit leverage by controlling and reducing the supply chain costs
ii. Management of supply chain boosts the Cash Flow as the flow of the products to the customer is accelerated
iii. The use of large-scale fixed assets is also reduced with the help of supply chain management by redesigning the network and ensuring cost cutting where possible
iv. The cost of holding inventory is also cut down which further decreases the purchasing cost. The high inventory cost when cutting down results in significant savings
v. The design of supply chain enables companies to network with customers and serve them better, and leverage opportunities
vi. With the implementation of supply chain management companies have registered decreased production costs with the timely and efficient delivery of raw materials to assembly plants, avoiding material shortages
7. Opinion on Supply Chain Management
Besides the very many business advantages of supply chain management, the model plays a vital role in society. The knowledge, expertise, and capabilities it brings are used in cases of disaster relief missions, medical rescues, and related and non-related emergencies. SCM is used beyond the workings of the everyday product flow to diagnose issues and identify disruptions and inefficiencies in diverse areas.