Functions of Supply Chain Management (SCM)
While discussing an eCommerce or online business, we commonly come across the term supply chain management. It is an integral part of an online business and if you are an online entrepreneur you need to have some idea of the whole process. In simple terms, supply chain management or commonly known as SCM deals with the management related to the flow of goods and services at various stages. It may start from the manufacturer to the retailer, and ultimately to the customer. At each level, proper management is required in order to ensure seamless flow of the products.
The main goal of supply chain management involves management of a wide range of components and processes, such as storage of raw materials, managing the inventory, warehousing, and movement of finished from the point of manufacture to the point of consumption. In economic terms, it can be referred to as the design, planning, management, and execution of supply chain activities from the point of production to the point of sale.
Supply Chain Management Functions
On a broader level, supply chain management consists of these four major functions and key element components, such as:
Integration: This forms the crux of the supply chain and is meant to coordinate communications to produce effective and timely results. It can include innovation of new software or advanced technological processes to improve communications.
Operations: This involves management of the day to day operations in the eCommerce business. For example, it may deal with keeping an eye on the inventory or coming up with marketing approaches.
Purchasing: This deals with the purchasing decisions and management, such as purchasing raw materials, source materials and so on.
Distribution: This deals with the management of logistics across wholesalers, retailers, and customers. This may mean keeping an eye on the shipment, and other details.
In addition to these, there are also some subsidiary functions that an effective supply chain management process fulfills, such as:
- Aligning distribution flows
- Integrating the functions from manufacture to delivery
- Designing complex and advanced systems
- Managing an coordinating resources
If you get the basics right and manage your supply chain in the right way, you will surely enjoy good profits. Always remember that proper planning and implementation are the keys to a successful supply chain management.