Supply Chain Management

Supply Chain Management (SCM) is a series of activities needed to plan control and run product flows. This includes the process of acquiring raw materials, the production process, and the distribution of products to end consumers, in the most efficient and cost-effective way. SCM is a broad and complex business that depends on each partner from suppliers to producers and so on, to run well. The purpose of supply chain management itself is to maximize customer value and gain a competitive advantage in the market. To achieve this, various efforts are needed, both business strategies and specialized software.

Supply Chain Management have 3 components, that is Upstream Supply Chain Management which is a process where the company gets supplier from outside parties to get raw materials. Then the second component is Internal Supply Chain Management, which is a change from raw materials into a finished product. The last component is the Downstream Supply Chain Management, a process in which the distribution of products by the company to customers is normally carried out by an external distributor.

Supply Chain Management involves so many processes, from production preparation to meeting customer needs.

In most business or manufacturing industries, customers are the first chain to place orders. Especially if the company is OEM-oriented or Original Equipment Manufacturer. The customer will decide to buy the product offered by the company concerned then contact the sales department or sales in the company. There’s important information contained in the order such as the date of delivery of the product and the desired amount. After the order is made by the customer, the planning department will prepare a production plan to be able to produce the products needed by the customer. At this stage they realize what raw materials are needed and also what supporting materials.

The next process is purchasing, where the purchasing department will order the raw materials and supporting materials then determine the date of receipt and amount needed. After that the raw materials and supporting materials are received by the factory. And then the quality and determination of the amount will be checked. Only then stored in a warehouse to meet production needs. The production department will use the raw materials. It also uses supporting materials which are supplied by suppliers. Then the production activities carried out to be able to produce finished goods are then put into a warehouse to be sent to the customer according to a predetermined schedule.

To ensure that the orders reach the customer on time, the seller should have a tool to track the courier. Order return usually occur when a consumer submits a return due to damage, error, or delay. This process involves several activities such as checking the condition of the product, authorizing a return, replacing the product, and scheduling delivery, refunding money. Supply chain management software is very important to help company manage the supply chain in their business. Without this software, it is feared that supply chain activities could not run smoothly.

References

Armstrong, Gary., dan Kotler, Philip. (2007). Marketing : an introduction. 8th edition. Pearson Education.

Keller, K.L dan Kotler, P. (2007). Manajemen Pemasaran (Terjemahan, Edisi 12, Jilid 1). Jakarta: PT Indeks.

https://www.academia.edu/10327075/Kelebihan_kekurangan_CRM