Managing The Supply Chain
What is Supply Chain Management ?
Supply chain management (SCM) is the active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage. It represents a conscious effort by the supply chain firms to develop and run supply chains in the most effective & efficient ways possible. Supply chain activities cover everything from product development, sourcing, production, and logistics, as well as the information systems needed to coordinate these activities.
The concept of Supply Chain Management (SCM) is based on two core ideas:
- The first is that practically every product that reaches an end user represents the cumulative effort of multiple organizations. These organizations are referred to collectively as the supply chain.
- The second idea is that while supply chains have existed for a long time, most organizations have only paid attention to what was happening within their business activities. Few businesses understood, much less managed, the entire chain of activities that ultimately delivered products to the final customer. The result was disjointed and often ineffective supply chains.
Benefits of supply chain management
Supply chain management creates efficiencies, raises profits, lowers costs, boosts collaboration and more. 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 the appropriate strategies and software to help manage the growing complexity of today’s supply chains.
IS for Supply Chain
- Supply Chain Planning Software to predict demand, synchronize with supply, and optimize the whole network.
- Warehouse management Software (WMS) to manage and optimize inventories, space allocation, shipments, cross-docking, and other warehouse activities.
- Transportation management Software (TMS) to optimize shipping, logistics, and fleet routing and scheduling
Supply chain management software evolved as specialized tools and applications, often developed to address one aspect of supply chain in a single industry. For example, supply chain software might include:
- Supply Chain Planning Software to predict demand, synchronize with supply, and optimize the whole network.
- Warehouse Management Software (WMS) to manage and optimize inventories, space allocation, shipments, cross-docking, and other warehouse activities.
- Transportation Management Software (TMS) to optimize shipping, logistics, and fleet routing and scheduling.
- Manufacturing Execution System to manage activities and flow through the manufacturing process.
- Global Trade Management Software to ensure compliance for cross-border transactions for importers and exporters.
Making all these specialized software applications work together is very challenging, but managers need a clear, end-to-end picture of supply chain performance. Increasingly, vendors are building software that combines several SCM applications and share data.
