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Introduction to Supply Chain Management
  • Last Updated : 04 Sep, 2020

A supply chain is like a network which provides facilities and options like distribution which perform operations like Procurement of material, transformation of these materials to specific intermediates and after than finish product and the distribution procedure starts which starts distributing respective products to customers. Following are the some key points regarding supply chain.

  • In the previous times, all the organizations like marketing, distribution, planning, manufacturing and purchasing organizations work independently along the supply chain.
  • Organizations have their independent objectives which are sometimes conflicting also.
  • To work in a efficient manner there arises a need for through which these different functions are able to integrate together.
  • Therefore, Supply chain management is a strategy came into arise through which such integration can be achieved.

Flows in supply chain :

Figure : Flow in supply chain

Flow resembles a chain reaction. In this, there is a flow of material from supplier to customer. Both supplier and customer shares information. There is also a flow funds from customer to supplier.

Supply Chain Management in Supply Network :

  • Supply chain management is responsible for management and control flows of material, information, and finances in supply chains.
  • Task of Supply chain management is to design, plan, and execute activities at different stages so as to provide desired levels of service to supply chain customers profitably.

Examples of Supply Chain Management :

  • Dell
  • Toyota/ Volkswagen
  • McMaster Carr / W.W. Grainger, sell auto parts
  • Amazon
  • Frozen food industry/Fast food industry/5 star restaurants
  • Internet shopping

Advantages of Supply chain management :

  1. Supply chain planning and collaboration –
    With SCM user can model his/her supply chain, set goals, optimize and schedule time. It enables users to maximize returns on assets and ensures a profitable match of supply and demand.
  2. Supply chain execution –
    It enables users to carry out supply chain planning and generate high efficiency at the lowest possible costs.
  3. Supply chain visibility design and analytics –
    SCM gives user a network-wide visibility across your extended supply chain to perform strategic and as well as day-to-day planning.
  4. Business benefits –
    It allows his users to transform a traditional linear supply into an adaptive network with the following benefits :
    • Faster response to changes in supply and demand
    • Increased customer satisfaction
    • Compliance with regulatory requirements
    • Improved cash flow
    • Higher margins
    • Greater synchronization with business priorities

Attention reader! Don’t stop learning now. Get hold of all the important CS Theory concepts for SDE interviews with the CS Theory Course at a student-friendly price and become industry ready.


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