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Key Components Of Supply Chain Management

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Supply Chain Management (SCM) is the wider concept of looking at the business needs from the sourcing till the production of the final product and delivering it to the customer. SCM attempt to centrally control or link the sourcing, the production, the shipment, the warehousing and distribution of products. The purpose is to ensure the whole business know what is happening when and where. By managing the international supply chain, companies are able to cut wastage and become more lean and mean, be more competitive and provide products faster. Being more lean and mean will drive the company to keep tighter control of internal inventories, production, distribution, sales and the inventories held and forecasted are all key elements in the SCM. …show more content…

It includes the movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption. Interconnected or interlinked networks, channels and node businesses are involved in the provision of products and services required by end customers in a supply chain. Supply chain management has been defined as the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally. SCM draws heavily from the areas of operations management, logistics, procurement, and information technology, and strives for an integrated approach.” …show more content…

The following are seven basic components of Supply Chain Management (SCM):
1. Plan — This is the strategic portion of SCM. Companies need a strategy for managing all the resources that go toward meeting customer demand for their product. A big piece of SCM planning is developing a set of metrics to monitor the supply chain so that it is efficient, costs less and delivers high quality and value to customers.
2. Sourcing — Once companies have planned and developed their SCM strategy, the next step is to find and select the suppliers of the required goods and services needed to create the final product or service. Supply chain managers, together with their suppliers must develop a set of pricing, delivery and payment processes and also create metrics for monitoring and improving the relationships. SCM managers should then put together processes for managing their inventory, including receiving and verifying shipments, transferring them to the manufacturing facilities and authorizing supplier

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