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    What Is Supply Chain Management ?

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    mushtak123
    Supply chain management involves planning and coordinating the flow of goods and services from suppliers to customers. It includes key functions like procurement, production, delivery, and return/reverse logistics. The objectives of SCM are to provide uninterrupted flow of materials with minimum inventory and lowest costs while maintaining quality and developing supplier relationships. Information technology plays an important role in SCM by increasing efficiency through tools like EDI, e-commerce, barcoding, and enabling information sharing across the supply chain.

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    What Is Supply Chain Management ?

    Uploaded by

    mushtak123
    205 views5 pages
    Supply chain management involves planning and coordinating the flow of goods and services from suppliers to customers. It includes key functions like procurement, production, delivery, and return/reverse logistics. The objectives of SCM are to provide uninterrupted flow of materials with minimum inventory and lowest costs while maintaining quality and developing supplier relationships. Information technology plays an important role in SCM by increasing efficiency through tools like EDI, e-commerce, barcoding, and enabling information sharing across the supply chain.

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    Supply chain management involves planning and coordinating the flow of goods and services from suppliers to customers. It includes key functions like procurement, production, delivery, and return/reverse logistics. The objectives of SCM are to provide uninterrupted flow of materials with minimum inventory and lowest costs while maintaining quality and developing supplier relationships. Information technology plays an important role in SCM by increasing efficiency through tools like EDI, e-commerce, barcoding, and enabling information sharing across the supply chain.

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    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    205 views5 pages

    What Is Supply Chain Management ?

    Uploaded by

    mushtak123
    Supply chain management involves planning and coordinating the flow of goods and services from suppliers to customers. It includes key functions like procurement, production, delivery, and return/reverse logistics. The objectives of SCM are to provide uninterrupted flow of materials with minimum inventory and lowest costs while maintaining quality and developing supplier relationships. Information technology plays an important role in SCM by increasing efficiency through tools like EDI, e-commerce, barcoding, and enabling information sharing across the supply chain.

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    WHAT IS SUPPLY CHAIN MANAGEMENT ?

    A Supply chain is a measure of facilities and distribution options that performs the
    functions of procurement of materials, transformation of these materials into
    intermediate and finished products and the distribution of these finished products
    to customers.

    Supply chain integrates the key business processes of an organization from end
    user through original suppliers that provides products, services and information that
    add value for customers and other stakeholders.

    What are the various elements in SCM ?

    There are five major elements in SCM -

    1. Production : This is related to issues on what to produce, how to


    produce( which manufacturing process) and when to produce.

    2. Inventory : Here the decisions and issues may be concerned with how much
    to make and how much to store as inventory and where to store these items (
    at the plant itself, warehouse, or at the retailer etc.)

    3. Location : A number of issues regarding location such as where to locate a


    plant, where to locate a warehouse facility etc. may have significant bearing
    on the dynamics of the supply chain and in turn may affect the overall costs.

    4. Transportation : The issue may be related to how to move a product from one
    location to another and by what mode of transportation. One needs to
    evaluate economies of scale on one hand and the desired level of customer
    satisfaction on the other hand.

    5. Information : Information is a binding force having critical implication for the


    supply chain. Information acts as a basis for making various decisions in the
    supply chain. It also acts as an integrator. Unless information flows are
    handled properly, one may not be able to derive benefits from the supply
    chain integration.

    What are the objectives of SCM ?

    The objectives of SCM are :

    1. To provide an uninterrupted flow of materials, supplies and services required


    to operate the organization

    2. To keep inventory investment at a minimum

    3. To maintain and improve quality

    4. To find or develop competent suppliers


    5. To purchase required materials at the lowest possible cost

    6. To improve the organization’s competitive position

    7. To achieve productive working relationships with other functional areas


    within the organization

    8. To accomplish the purchasing and marketing objectives at the lowest


    possible level administrative costs

    What are the functions of SCM ?

    The main functions of SCM are as follows :

    1. Plan : This is the strategic portion of SCM. One needs a strategy for managing
    all the resources that go toward meeting customer demand for a product or
    service. This may include developing a set of metrics to monitor the supply
    chain so that it is efficient, cost less and delivers high quality and value to
    customers in the most cost-effective manner.

    2. Source : One has to choose the suppliers that will deliver the goods and
    services needed to create final product or service. This involves developing a
    set of pricing, delivery and payment processes with suppliers and metrics for
    monitoring and improving the relationships.

    3. Make : This involves making schedule for activities necessary for production,
    testing, packaging and preparation for delivery.

    4. Delivery : This involves coordination of the receipt of orders from customers,


    developing a network of warehouses, picking carriers to get products to
    customers and setting up an invoicing system to receive payments.

    5. Return/ Reverse Flow : This refers to the reverse flow of goods from customer
    back to manufacturer. This involves creating a network for receiving
    defective and excess products back from customers and supporting
    customers who have problems with delivered products.

    What is importance of IT in SCM ?

    The integration of IT in SCM is aimed at leveraging information tools to


    address the following concerns : Flexiblity, and variety, Quality, Responsiveness,
    and Edging toward agility. Its main objective is to increase the efficiency and
    effectiveness of working so that we get quantum improvements performance
    measures.

    Some of the major developments in IT which are transforming the supply chains are
    as follows :
    • ELECTRONIC DATA INTERCHANGE (EDI)

    EDI is the interchange of standard formatted data between computer


    application systems of trading partners with minimal manual intervention.

    • INTRANET & EXTRANET

    Intranet is the internal web of an organization . It is used for distribution of


    information within an organization .

    When access to intranet is extended to external users, it becomes an extranet. It is


    used for information transaction among the clients, partners, customers, and
    suppliers.

    • E-COMMERCE

    The internet has vastly expanded the value of goods and services business
    trade electronically. E-commerce results in lowering purchasing cost, a reduction of
    inventories, lowering cycle time, more efficient and effective customer services,
    lowering sales and marketing cost and new sales opportunities

    • E-PROCUREMENT

    It is defined as use of electronic technologies to streamline and enable


    procurement activities of an organization. E procurement process includes
    advertising tenders; electronic mail between buyers/sellers; electronic mail in
    contract management; research into supplier markets and integration of
    procurement within the financial and inventory systems.

    • BAR CODING TECHNOLOGY

    The idea of a bar code is to encode an identification number for something


    that will be unique.

    What is reverse SCM ?

    Reverse supply chain management is the disposition of any asset that is no longer
    suitable to perform its primary functions or is not sufficiently cost effective to suit
    ever changing technology.

    The Reasons for Flow reversal of Products:

    • Commercial Returns

    • Product Recalls

    • Warranty Returns
    • End-of-Use Returns

    • End-of-Life Returns

    Benefits of RSCM

     Customer Satisfaction

     Achieving Economies of Scale

     Effective inventory management, and reduced store level costs

     Improved Management Information Systems

     Improved Supplier Relationship and enhanced supplier satisfaction

     Improved image of the organization

    What is Integrated Supply Chain Management ?

    It’s a synchronization of various activities such as production, transportation , other


    services and inventory decisions. It links the front end of the supply chain i.e.
    customer demand, to the back end of the supply chain i.e. production and
    manufacturing portion of the supply chain.

    The benefits of Integrated Supply chain Management are :

    • Lower cost manufacturing process

    • Increased sales

    • Increased customer responsiveness

    • Reduced fixed assets and working capital

    • Reduced inventory for entire supply chain

    • Reduced obsolescence risk

    • Improved forecasting

    • Demand-driven manufacture

    • Vendor-Managed Inventory ( VMI)

    What is difference between Logistics & SCM ?


    Logistics management is that part of the Supply Chain Management process that plans, implements, and
    controls the efficient, effective forward and reverse flow and storage of goods, services, and related
    information between the point of origin and the point of consumption in order to meet customers'
    requirements.

    Supply Chain Management encompasses the planning and management of all activities involved in
    sourcing and procurement, conversion, and all Logistics Management activities. Importantly, it also
    includes coordination and collaboration with channel partners, which can be suppliers, intermediaries,
    third-party service providers, and customers.

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