Supply Chain Management

supply chain management (SCM)
Supply chain management (SCM) is the optimization of a product's creation

and flow from raw material sourcing to production, logistics and delivery to the
final customer.
SCM encompasses the integrated planning and execution of processes

required to manage the movement of materials, information and financial
capital in activities that broadly include demand planning, sourcing,
production, inventory management and storage, transportation -- or logistics --
and returning excess or defective products. Supply chain management relies
on both business strategy, specialized software and collaboration to work.
Because it's such an expansive, complex undertaking, each partner -- from

suppliers to manufacturers and beyond -- must communicate and work
together to create efficiencies, manage risk and adapt quickly to change.
In addition, supply chain sustainability -- which covers environmental, social

and legal issues, in addition to sustainable procurement -- and the closely
related concept of corporate social responsibility -- which evaluates a
company's effect on the environment and social well-being -- are areas of
major concern for today's companies.
Benefits of supply chain management

Supply chain management creates a number of benefits that translate to higher profits,
better brand image and greater competitive advantage. 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 less product waste;
 improvements in quality;
 increased sustainability, both from a societal and an environmental
standpoint;
 lower overhead;
 improvements in cash flow; and
 More efficient logistics.

Five stages of supply chain management
Supply chain management can be broadly categorized into five steps or areas:
Plan. Using supply chain analytics and materials management features in

ERP systems, organizations create strategic plans to meet customer demand
for product and avoid a bullwhip effect.
Source. Organizations identify and select vendors that can supply materials in

a streamlined and efficient way according to agreements. Supply chain
collaboration starts at this stage and is important throughout the supply chain
management process.
Make. In this stage, products are manufactured. It includes scheduling the

production, testing, ensuring compliance requirements are followed, packing,
storage and release. Multiple machines are likely to be involved, especially for
larger companies, and these increasingly use technologies such as IoT and AI
to work more efficiently.
Deliver. The delivery stage pertains to logistics and focuses on getting

finished goods to consumers, in whatever manner of transportation is needed.
As the Amazon effect has grown, especially as a result COVID-19, more focus
is on doorstep delivery. Greater emphasis is now also on supply chain leaders
working more closely with customer service. Inventory management
and warehouse management systems are especially crucial at this stage.
Return. The return stage includes all product returns, including defective
products and products that will no longer be supported. This stage also
includes elements from other stages, including inventory and transportation
management.
Example of SCM
The most basic version of a supply chain includes a company, its suppliers
and the customers of that company. An example would be: raw material
producer, manufacturer, distributor, retailer and retail customer.
Most supply chains are far more complex and layered. This is why examples of
unsuccessful supply chain management, where risk is not managed or disruption
occurs, can be so helpful.
Food shortages due to COVID-19 are a good example of supply chain management
gone awry. The food supply chain was disrupted in a number of ways. For example,
many restaurants and schools closed to accommodate stay-at-home orders, causing
products meant to go to institutional settings in bulk to no longer be needed. Instead,
an exponential number of consumers were eating at home, which had different
packaging requirements, among other issues. The meat industry also ran into supply
chain management disruptions due to issues such as COVID-19 outbreaks in
slaughterhouses.
The role of supply chain management software

Technology is critical in managing today's supply chains, and ERP vendors offer
modules that focus on key functions within SCM. There are also business software
vendors that focus specifically on SCM. A few important areas to note include the
following:
 supply chain planning software for activities such as demand management;
 supply chain execution software for activities such as day-to-day

manufacturing operations;
 supply chain visibility software for tasks such as spotting and anticipating risks
and proactively managing them;
 inventory management software for tasks such as tracking and optimizing

inventory levels;
 logistics management software and transportation management systems for

activities such as managing the transport of goods, especially across global supply
chains; and
 warehouse management systems for activities related to warehouse

operations.
Infor, Blue Yonder (formerly JDA Software), Manhattan

Associates, Oracle and SAP are well-known vendors of supply chain software.
The increasingly global nature of today's supply chains and the rise of e-commerce,
with its focus on nearly instant small deliveries straight to consumers, are posing
challenges, particularly in the area of logistics and demand planning. A number of
strategies -- such as lean manufacturing -- and newer approaches -- such as demand-
driven material requirements planning -- may prove helpful.
Technology -- especially big data, predictive analytics, IoT technology, supply chain

analytics, robotics and autonomous vehicles -- is also being used to help solve modern
challenges, including in the areas of supply chain risk and disruption and supply chain
sustainability.
As just two examples, IoT can help with transparency and traceability to help boost
food quality and safety by using sensors to monitor the temperature of perishable food
while it's in transit. And analytics can help determine where to put smart lockers in
densely populated areas to cut the number of single-item deliveries and lower
greenhouse gas emissions.

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supply chain management (SCM)

Supply chain management (SCM) is the optimization of a product's creation

SCM encompasses the integrated planning and execution of processes

Because it's such an expansive, complex undertaking, each partner -- from

In addition, supply chain sustainability -- which covers environmental, social

Benefits of supply chain management

 better ability to predict and meet customer demand;

 better supply chain visibility, risk management and predictive capabilities;

 fewer process inefficiencies and less product waste;

 improvements in cash flow; and

 More efficient logistics.

Plan. Using supply chain analytics and materials management features in

Source. Organizations identify and select vendors that can supply materials in

Make. In this stage, products are manufactured. It includes scheduling the

Deliver. The delivery stage pertains to logistics and focuses on getting

The role of supply chain management software

 supply chain planning software for activities such as demand management;

 supply chain execution software for activities such as day-to-day

 inventory management software for tasks such as tracking and optimizing

 logistics management software and transportation management systems for

 warehouse management systems for activities related to warehouse

Infor, Blue Yonder (formerly JDA Software), Manhattan

Technology -- especially big data, predictive analytics, IoT technology, supply chain

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