What is Supply Chain Management?
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by: chrissturat
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Supply chain is the crucial element in an organization as it deals with all the steps necessary for converting raw materials into their respective finished products. Managing the supply chain efficiently is essential for operational efficiency and ultimately achieving established business objectives. Supply chain management is a set of processes that monitor activities occurring in the supply chain so that optimal results are achieved and resources are utilized without wastage. There are five phases in supply chain management. These include plan, develop, make, deliver, and return. In the first phase a plan is derived, according to which various activities in the supply chain process are to be coordinated and carried out. Best strategies are developed so that subsequent processes in the chain take place smoothly. In the second phase, develop. Various suppliers are assessed and at this point a strong relationship should be established with them so that required raw materials are procured. Other aspects such as shipment of raw materials and payment terms are also decided at this stage. It is in the make stage that the product is developed, tested if it conforms to specifications and finally packaged for delivery. This is the most important phase of the supply chain and all processes here have to be managed efficiently so that client demands are conformed and the product meets client's specifications. Once the product is ready, the next stage which is 'deliver' occurs, wherein the client receives goods as planned. The fifth stage of the supply chain happens if the client find fault with the delivered product and therefore 'returns' it. The organization must deal with the faulty product and answer client questions and take necessary steps for rectification. It is vital for every organization to implement supply chain management processes as it enables them to make better utilization of resources and reduces costs. It helps to streamline supply chain activities, enables efficient communication between various department in the supply chain process, better collaboration with partners and response to customers in real time.
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