The management of the movement of products and services is referred to as supply chain management(SCM), and it covers all procedures that convert raw materials into finished items. It includes a company’s supply-side activities being actively streamlined in order to enhance customer value and obtain a competitive advantage in the market. It is a deliberate attempt by supply chain organizations to build and operate supply chains in the most efficient and effective way possible.
Suppliers strive to build and execute supply chains that are just as efficient and cost-effective as necessary through SCM. Supply chains involve everything from manufacturing to product creation, as well as the information systems required to coordinate these activities.SCM seeks to regulate or link the shipment, distribution, and production of a product central companies can save money and deliver items to customers faster by effectively managing the supply chain. This is accomplished by maintaining greater control over internal inventories, sales, distribution, internal manufacturing, and company vendor stocks.
The Supply Chain Management concept is based on two main ideas:
- Almost every product that reaches a customer is the result of the combined efforts of several companies. The supply chain refers to all of these companies working together.
- Despite the fact that supply chains have been around for a long time, most businesses have solely focused on what happens within their “four walls.” Few companies understood, let alone managed, the complete chain of events that led to the final delivery of products to the client. As a result, supply chains become disjointed and often unproductive.