Supply Chain Management (SCM)

SCM is a process for planning, implementing and controlling all operations in a supply chain in order to meet all customer demands most efficiently. SCM takes place during a process of transporting and storing materials and check on-going works and finished products from manufacturing to consumption.

Functions

Adding more management levels or increasing the level of each component in a supply chain can increase the possibility to unite business processes. Components in a supply chain management include:

• Planning and monitoring
• Work structure
• Company organization
• Equipment structure (product line)
• Equipment structure (information line)
• Management approaches
• Management and rights structure
• Risk and reward structure
• Culture and behavior

Benefits from using SCM

• Enhancing productivity of all product lines by mutual collaborations among suppliers
• Improving customer services and minimizing stocks
• Reducing warehouse storage fee
• Reducing product unit price and maximizing benefits
• Reducing unnecessary costs
• Improving corporate competivitity
• Establishing a supply chain among traditional partners
• Promptly adapting to market changes and reducing negative effects on customers

Risks from using SCM

• Choosing an inappropriate SCM system might consequently affect all operations of a company, from production materials to distribution channels.
• An SCM incompatible to other operational management tools such as accounting system and business softwares might ruin a business.
• Other business models with many branches, partners and representative offices might lead to unanalyzable disorders.

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