What is Supply Chain Management?

Supply chain management refers to the coordinating and supervising of different processes. These processes involve, producing, distributing, and delivering products and services from their point of origin to the final customer.

Understanding how your business can increase efficiency, maintain output, and expand within the market. which will give customers the most comfortable experience is a part of working in supply chain management.

Some who works in supply chain management has two major responsibilities, which are:

1. Assure product availability for consumers

Consumer markets are driven by competition. Therefore, companies need to ensure that when a customer wants to buy anything, their items are available. Supply chain management works to ensure this.

Additionally, a consumer will be less inclined to place another purchase from the same business. If they order something online and it takes a long time to arrive, or worse, never comes.

2. Make sure that the manufacturer has access to the materials required to produce the product

Supply chain experts need to source resources. They also need to find production partners, arrange transportation services, and provide easy ways for returns. A supply chain that optimizes output and efficiency provides the business with growth prospects and steady income streams.

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Synonyms of Supply Chain Management

• Supply Chain Operations
• Supply Network Management
• Value Chain Management
• Supply Flow Coordination
• Logistics Management

How does supply chain management work?

The five main areas of work that a supply chain manager is responsible for are planning, sourcing, organizing, delivering, and managing. The supply manager is responsible for certain responsibilities in each sector.

1. Making a Supply Chain Network Plan

Every "link" in the chain needs to be thoroughly planned before finalizing any agreements with suppliers or releasing the goods onto the market. It is important to guarantee a smooth transition between processes and that all stakeholders are aware of their respective roles. The efficiency of this is another factor. 

A "kink" in the supply chain is caused when one link falls behind the others, which slows down output as a whole. This may cause production issues later on and postpone the product's delivery to customers.

2. Purchasing Materials

Purchasing the supplies required to create the good or service is the next step. Identifying the supplier, calculating the quantity to order, monitoring the supply, and paying the suppliers are all part of this process.

Apart from making sure the product is safe for customers, You also need to make sure your supplier complies with all applicable requirements. People who work on supply chain management monitor any changes in prices and the pricing of new suppliers. They do this to maintain product prices within the projected range.

3. Organizing Manufacturers

Identifying the right manufacturer for your product is the next stage. This corporation, group, or individual turns the raw resources into the final product.

With supply chain management, the goal is to make sure every product fulfils the required standard. They schedule quality testing, often with the help of an independent company. Packing and delivering the goods to the delivery service are the responsibilities of the manufacturer. Handling communications between purchasing, manufacturing, and delivery of materials is crucial in this domain. To maintain production, these three elements require an established flow. 

4. Product Delivery

Managing the product's delivery comes next. Logistics in the supply chain must be taken into account. The delivery service needs to be dependable and efficient, regardless of whether it is being delivered to stores or clients' houses. Products that are damaged, deliveries that are delayed, or orders that are placed incorrectly may all harm a business's reputation and drive away customers.

5. In charge of Return Services

A quick and easy return policy is needed in case a consumer is not satisfied with the goods or wants to swap them out for a different one. The returned goods can be given to another consumer so there is less waste of product.

Types of Supply Chain Management Models

Every company has a different approach to supply chain management. Every company's SCM process is unique and will be shaped by its own objectives, limitations, and assets. Some of the models that a business might use to direct its SCM initiatives are as follows:

• Continuous Flow Approach

The continuous flow approach is predicated on a company consistently producing the same item and anticipating minimal volatility in consumer demand. This approach is one of the most established supply chain techniques and works well in developed sectors.

• Agile Model

An organization may need to adjust its course at any time. The agile model places a high priority on flexibility in order to meet changing demands. Businesses that offer custom-order items or have erratic demand should find success with this strategy.

• Rapid Model

With a short life cycle, this model illustrates a product's swift turnover. By using a rapid chain model, a business aims to take advantage of a trend, create items quickly, and make sure the product is sold out completely before the trend expires.

• Flexible Model

The flexible approach works best for businesses that are subject to seasonality. During peak season, certain firms could have substantially greater demand requirements. While others might have lower volume requirements. A supply chain management approach that is adaptable guarantees that production can be smoothly geared up or dialed down.

• Efficient Model

Businesses that compete in markets with extremely narrow profit margins could try to gain an advantage by optimizing their supply chain management procedure. This might involve developing strategies for optimizing the use of machinery and equipment, controlling inventories, and fulfilling orders.

• Custom Model

If none of the following models work for a corporation, they may always use a customized model. It’s perfect for highly specialized businesses with demanding technological needs, like auto manufacturers.