Supply Chain Management
Supply chain management (SCM) is the broad range of activities required to plan, control and execute a product’s flow from materials to production to distribution in the most economical way possible.
SCM encompasses the integrated planning and execution of processes required to optimize the flow of materials, information and capital in functions that broadly include demand planning, sourcing, production, inventory management and logistics — or storage and transportation. Companies use both business strategy and specialized software in these endeavors to create a competitive advantage.
Supply chain management is an expansive and complex undertaking that relies on each partner — from suppliers to manufacturers and beyond — to run well. Because of this, effective supply chain management also requires change management, collaboration and risk management to create alignment and communication between all the participants.
Supply chain management produces benefits such as new efficiencies, higher profits, lower costs and increased collaboration. SCM enables companies to better manage demand, carry the right amount of inventory, deal with disruptions, keep costs to a minimum and meet customer demand in the most effective way possible. These SCM benefits are achieved through choosing effective strategies and appropriate software to manage the growing complexity of today’s supply chains.
Technology — especially big data, predictive analytics, IoT, supply chain analytics, robotics and autonomous vehicles — is also being used to help solve modern challenges, including supply chain risk and sustainability. Most of the emerging technologies have the common goals of making it easier to gather more detailed supply chain data and analyze and act on it quickly.
