Supply chain management

 

A supply chain or logistics chain is a system of processes, people, activities, information, and resources needed to get a product or service from producer to consumer. Physical flows- are material movement and storage. Information flow- helps various members of the chain to coordinate together in varied scales and control their day to activities based on each other's activities

 


There are 5 primary components of a supply chain management system

 

The plan or strategy: Every organization must plan and manage all the resources needed to meet customers need they must also decide their supply chain and determine which metrics they will use so that they ensure the supply chain is efficient

Sourcing: It is essential to choose suppliers that can provide the goods and services that are needed to produce their products. Once the supplier is under contract the supply chain manager can use various processes to monitor the activities of their suppliers

Manufacturing: all the activities within such as accepting raw material, manufacturing, inspecting, quality control, packaging, scheduling are performed.

Delivery and logistics: this part coordinates customer orders, packaging, dispatching, invoice creation, and receiving payments. shipping products to their customers could require a fleet of vehicles.

The return system: every supplier needs a network so that he could quickly respond to defective products from the customer or to the supplier

 

 Importance of  SCM :

 

* SCM  is the centralized management system of the flow of goods and services and includes all processes that transform raw materials to final products.

* Managing the supply chain gives companies the means to cut the cost and deliver the product to the consumer faster.

* Proper supply chain management keeps companies profitable and helps avoid expensive recalls.