What is SCM?
In this jargon laden business world it is very common to come across some one mentioning the three letter acronym SCM, which stands for supply chain management. However, very few people actually understand what supply chain management is as a business concept. The idea behind this piece is to throw some light on the meaning and scope of SCM.
Supply chain management is the amalgamation of science and art that is employed into improving the way a company or a business finds the raw components it needs to make a product or service, manufactures that product or service and delivers it to the final customers through its distribution channels.
There are basically five basics components that make up a whole supply chain management system. These are planning, sourcing, manufacturing, delivering and after sales.
The first phase, which is planning is the strategic portion of supply chain management. A strategy is required for managing all the resources that are required to meet the customer demands. A lot of
planning goes into developing metrics to monitor the supply chain on parameters of efficiency, costs effectiveness and quality.
The second phase is sourcing. In this stage, suppliers that will deliver the goods and services required for the business is carefully chosen. Also, it is vital to develop a set of pricing, delivery and payment processes.
The next logical step is to manufacture the goods or services. Put in place the required process for production, testing, packaging and preparation for delivery.
Then there is the ultimate goal of delivering. This part is also referred to as "logistics." And last but not the least; the ‘after sales’ function kicks in. This phase take care of problem part of the
supply chain. In this a network for receiving defective back from customers and supporting customers who have problems with delivered products is established and maintained.
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