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What is supply chain management?
1. What is Supply Chain Management :
Supply chain management (SCM) is the active management of the supply chain applies to maximize
consumer value and achieve a sustainable ambitious profit. It describes a deliberate work by the
availability chain companies to develop and run supply chains within the best & efficient ways possible.
Supply chain projects include everything from development, sourcing, production, and logistics, also
because the information systems needed to organize these activities.
2. The concept of Supply Chain Management (SCM) :
The primary is that nearly every product that gives a user represents the collective effort of multiple
organizations. These companies are considered collectively because of the supply chain.
The second idea is that while supply chains have existed for an extended time, most organizations have only
paid attention to what was happening within their Supply chain management (SCM) is the effective control of
supply chain activities to maximize consumer value and gain sustainable competing services. It represents a
conscious effort by the availability chain firms to develop and manage supply chains within the best & efficient
ways possible. Supply chain activities include everything from developing, sourcing, creation, and logistics, also
because the information systems needed to organize these activities.
Definition supply chain management :
Supply chain management is the control of the progress of products and services and includes all processes
that transform raw materials into final products. ... SCM denotes an effort by suppliers to develop and execute
supply chains that are as effective and economical as possible.
3. Benefits of supply chain management :
Supply chain management creates a type of advantage that changes to higher profits, better brand image,
and greater competitive edge. These include the following:
Better ability to predict and meet customer demand;
Better supply chain visibility, risk management, and predictive
capabilities;
Fewer process inefficiencies and product waste;
Improvements in quality;
Developed sustainability, both from a societal and an
environmental viewpoint;
Lower overhead;
Improvements in cash flow; and More efficient logistics.
4. Functions of Supply Chain Management
The Role of global supply chain management primarily includes five functions mentioned below:
Purchasing:
This is the primary function of supply chain management. It concerns getting raw materials and other
resources that are needed to manufacture the products. It needs coordination with suppliers to deliver the
elements with no obstacles.
5. Operations :
The operation team joins in demand plan and forecast. Before giving staple order, the organization has got
to anticipate the possible market demand and the number of units it must produce. Accordingly, it
moreover places the ball rolling for inventory management, production, and transportation. If the demand
is over anticipated, then it could end in excess inventory cost. If the demand is under anticipated, the
organization wouldn’t be ready to meet customer demand, thereby resulting in revenue loss. So,
operations function plays a significant role in supply chain management
Logistics :
This role of supply chain management requires extensive coordination. The manufacturing of products has
commenced. It needs space for storage until it's shipped for delivery. This involves making local warehouse
arrangements. Let’s say; the products are to be delivered outside the town, state, or country limits. This
brings transportation within the loop. there'll even be a requirement for outstation warehouses. Logistics
ensures that products reach the end-point delivery with no glitches.
6. Resource Management :
Any production utilizes raw materials, technology, time, and labour. However, all the processes got to be
efficient and effective. This aspect is taken care of by the supply management function team. It decides the
allocation of resources within the right activity at the proper time to optimize the assembly at reduced
costs.
Information Workflow :
Information sharing and distribution is what keeps all other functions of supply chain management on
target. If the knowledge workflow and communication are poor, it could break apart the whole chain and
cause mismanagement. If you're getting to pursue a career as a retailer, you want to invest during a supply
chain management course to realize more knowledge. Over time, supply chain management has grown
from a comparatively simple concept to engineering and managing excellent multiple global networks. The
availability chain practices have transformed with the evolving technology and knowledge.
7. Advantages of Supply Chain Management :
Cost Efficiency:
The first and foremost advantage of supply chain management is that it helps the corporate in achieving cost
efficiency because it can lower various costs like transportation costs, warehousing, packaging costs, reduces
wastage by timely delivery of products on which ultimately helps the corporate in achieving cost efficiency
which successively increases the profitability of the corporate.
Helpful in Identifying Problem Areas:
In the absence of proper supply management company will find it hard to seek out problem areas as every
department will blame other departments for failure but thanks to this management company can identify the
matter areas within the company thanks to which company’s profitability and reputation are taking successful.
Hence, for instance, suppose the assembly department is producing goods in time but thanks to the lacklustre
attitude of dispatch departments goods aren't reaching on time to ultimate customers than supply chain
management can easily identify the matter area which is that the dispatch department and hence can take
action against the concerned people.
8. Customer Delight :
Since the first task of this management is to form sure that goods reach the customer on time it leads to
customer delight because nowadays people don't care about paying extra money provided they get quality
service from the corporate and provide chain management does exactly that leading to costumer of the
corporate getting satisfied and that we all know that a satisfied customer will bring not only his or her
business but acts as a marketing spokesperson of the corporate by bringing other customers to the
corporate.
9. Disadvantages of Supply Chain Management :
Lack of Coordination between Various Departments :
The biggest disadvantage of supply chain management is that it can work as long as there's proper
coordination between all the departments of the corporate and if departments are hostile then this technique
is going to be a failure. Hence for instance, if the marketing department doesn't inform the assembly
department about the possible order then the assembly department won't be ready to produce the specified
order on time.
Complicated :
Since it involves multiple departments sometimes it is often complicated and should hamper the traditional
working of the corporate besides workers also as employees may feel insecure and demotivated because
citizenry naturally resist new things and to them, the concept of supply chain management may appear very
complicated leading to them accepting this management half-heartedly.
10. Trained and Professional Staff :
It requires professional and trained staff to properly execute supply chain management and to rent a
professional staff company will get to pay money which is an upscale proposition which is that the reason
why small companies seldom choose supply chain management as an expense of implementing this
technique outweighs its benefits.
As one can see from the above that provide chain management has advantages also as disadvantages
which is that the reason why any company thinking of adopting this management should carefully read the
above points then decide whether to implement supply chain management into the corporate .
11. In conclusion, it's clear that successful supply chain management is critical to the survival of today’s business.
Computer simulations became a really useful for the supply chain management. Simulations can capture world
system variables and forecast the impact of management decisions. A simulation program helps managers to
raised understand the availability chain because it presently exists. This specific simulation was simple to follow
and provided a quick understanding of the availability chain.