What is Supply Chain Management?
As Customers are at the end of the network, who need certain product or
services, Supply Chain Management is the management of networks and
channels involved that serve the customer.SCM covers the movement and
storage of raw materials, WIP and finished goods from point of start to
point using the finished goods or services.
To serve the customer, Supply Chain Management need to design,
plan, execute, control and monitor Supply Chain activities. And their
objective is to create and increase the value of the Supply Chain, build
necessary infrastructure,leverage logistical needs, supply, and demand,
and measure performance even at the global level.
SCM tends to be an integrated approach along with logistics, procurement,
operations management and information technology.
SCM comprises of all Stages involved, directly or indirectly, in fulfilling a
customer request including manufacturers,suppliers, transporters,
warehouses, retailers, and customers.Within each company, the supply
chain includes all functions involved in fulfilling a customer request
(product development, marketing,operations, distribution,finance,
customer service). The Customer is an integral part of the Supply Chain.
SCM includes movement of products from suppliers to manufacturers to
distributors. It also includes movement of information, funds, and products
in both directions.It’s more accurate to use the term “supply network” or
“supply web”. all firms and relationships that get a product to market,
including the original acquisition of raw materials; production of the item
at a manufacturing facility; distribution to a retailer; sale of the finished
item to the customer, and any installation, repair, or service activities that
follow the sale.
Typical Supply Chain stages include:
Customers, retailers, distributors, manufacturers and suppliers . All stages
may not be included in the supply chains.
Example of a supply chain:
For easy understanding ,we may site an example of US Textile & Apparel
Supply Chain about 25,000 companies are working, where about 50,000
people are involved excluding retailing channels, which has five segments.
At the top of the Supply Chain, there are fiber producers. At the second
segment, fibers are spun, woven or knitted, which are usually called textile
mills. The Third segment of the supply chain is apparel manufacturer or other textile products manufacturers. The fourth segment is the retailers who make the products available to customers. Then, the customer which is the final part of the supply chain. All the earlier four segments are working to
satisfy the customer needs.