What is the Supply Chain Management (SCM)?

What is the Supply Chain Management (SCM)? The best companies around the world are discovering a  powerful new source of competitive advantage. Its called supply-chain management and it encompasses all of those  integrated activities that bring product to market and create  satisfied customers. The Supply Chain Management Program integrates topics from  manufacturing operations, purchasing, transportation, and  physical distribution into a unified program. Successful supplychain  management, then, coordinates and integrates all of these  activities into a seamless process. It embraces and links all of  the partners in the chain. In addition to the departments within  the organization, these partners include vendors, carriers, thirdparty  companies, and information systems providers. Within the organisation, the supply chain refers to a wide range of functional areas. These  include Supply Chain Management-related activities such as inbound and outbound  transportation, warehousing, and inventory control. Sourcing, procurement, and supply  management fall under the supply-chain umbrella, too. Forecasting, production planning  and scheduling, order processing, and customer service all are part of the process as well.   Importantly, it also embodies the information systems so necessary to monitor all of these  activities. Simply stated, the supply chain encompasses all of those activities associated with  moving goods from the raw-materials stage through to the end user.   Advocates for this business process realised that significant productivity increases could  only come from managing relationships, information, and material flow across enterprise  borders. What is the importance of Supply Chain Management In the ancient Greek fable about the tortoise and the hare, the speedy and overconfident  rabbit fell asleep on the job, while the slow and steady turtle won the race. That may  have been true in Aesops time, but in todays demanding business environment, slow  and steady wont get you out of the starting gate, let alone win any races. Managers these  days recognise that getting products to customers faster than the competition will improve  a companys competitive position. To remain competitive, companies must seek new  solutions to important Supply Chain Management issues such as modal analysis, supply  chain management, load planning, route planning and distribution network design.   Companies must face corporate challenges that impact Supply Chain Management such  as reengineering globalisation and outsourcing.   Why is it so important for companies to get products to their customers quickly? Faster  product availability is key to increasing sales,   An example of a Supply Chain Management application:   To Reduce Cycle Time, Kick Those Bad Habits   ..One of the chief causes of excessive order-to-delivery cycle times is the existence of longstanding  bad habits that result when companies fail to revise internal processes to reflect market  changes. The existence of separate, independent departments tends to perpetuate these inefficient  practices. Taking the supply-chain management view, on the other hand, helps companies identify  the cumulative effects of those individual procedures. Eliminating such bottlenecks improves  product availability and speeds delivery to customersboth of which can increase sales and profits.   Supply Chain Management Today   If we take the view that Supply Chain Management is what Supply Chain Management  people do, then in 1997 Supply Chain Management has a firm hand on all aspects of  physical distribution and materials management. Seventy-five percent or more of  respondents included the following activities as part of their companys Supply Chain  Management department functions:   Inventory management Transportation service procurement Materials handling Inbound transportation Transportation operations management Warehousing management Moreover, the Supply Chain Management department is expected to increase its range of  responsibilities, most often in line with the thinking that sees the order fulfilment process  as one co-ordinated set of activities. Thus the functions most often cited as planning to  formally include in the Supply Chain Management department are:   Customer service performance monitoring   Order processing/customer service Supply Chain Management budget forecasting On the other hand, there are certain functions which some of us might feel logically  belong to Supply Chain Management which companies feel are the proper domain of other departments. Most difficult to bring under the umbrella of Supply Chain  Management are: Third party invoice payment/audit Sales forecasting Master production planning Write-in responses reveal the leading edge of what some Supply Chain Management  departments are doing. These include engineering change control for packaging; custom   Today Supply Chain Management includes services such as: Operational Analysis and Design Materials Handling Distribution Strategy Operational Improvements, Distribution Management Computer Systems Warehouse Design Project Management Operational Commissioning Computer Simulation Technical seminars