What is Supply Chain Management?
SCM is the management of the flow of goods, data, and finances related to a product or service, from the procurement of raw materials to the delivery of the product at its final destination. Although many people equate the supply chain with logistics, logistics is actually just one component of the supply chain. Today’s digitally based SCM systems include material handling and software for all parties.
Supply chain activities span procurement, product lifecycle management, supply chain planning, logistics (including transportation and fleet management), and order management. SCM can also extend to the activities around global trade, such as the management of global suppliers.
The history of SCM
Supply chains have existed since ancient times, beginning with the very first product or service created and sold. Over time, incremental changes (such as the invention of computers) have brought additional levels of sophistication to SCM systems.
The internet, technological innovation, and the explosion of the demand-driven global economy have changed all that. Today’s supply chain is no longer a linear entity. Rather, it’s a complex collection of disparate networks that can be accessed 24 hours a day. Center of these networks, consumers expect their orders to be fulfilled, when they want, and the way they want.
Today SCM is all about the customer
SCM has historically been about increasing efficiency and reducing costs. Customer is now playing a front-and-center role in setting SCM priorities. It’s been said that “customer experiences live and die in the supply chain.”
Customer loyalty is predicated on an enterprise being able to quickly and accurately fulfill customer expectations. Raw materials, manufacturing, logistics, trade, and order management must all be coordinated to get a given item to the customer. To accomplish this, companies must look at their supply chains through their customers’ eyes. It’s not simply about getting the order to the customer on time; it’s about doing everything at the right time—before, during, and after order delivery.
Supply chains and their need for agility
Today’s supply chain is broad, deep, and continually evolving, which means that it must be agile to be effective. Consumers now have multiple choices in how they purchase products—in stores, online, and more. They’ve also come to expect increasing levels of customization. An agile supply chain can deliver on those expectations.
Not only that, supply chain sourcing has become very fluid. For example, geopolitical and economic developments can substantially impact the manufacturing supply chain. If a manufacturer needs aluminum and can’t get it from one supplier, that manufacturer must be able to quickly pivot to source the aluminum elsewhere. The ability to rapidly reconfigure your supply chain is essential to successfully addressing this type of scenario.
Challenges in the supply chain extend beyond efficiency and cost management issues. Changing circumstances can impact regulatory compliance as well. Your SCM system must be flexible enough to mitigate all the impacts that are generated by changes in the supply chain.
An intelligent SCM system can help you be more efficient. It reduces costs while remaining compliant with a variety of ever-changing legal mandates.
Supply Chain Management and the cloud
Cloud is a natural ally, in part because cloud-based applications are inherently more flexible and adaptable to change. Cloud solutions are also inherently architected to make better use of the technologies. Retrofitting your environment so these technologies can function on legacy applications is both complicated and expensive.
Another benefit of integrating the cloud into your SCM system is that you can adopt elements of cloud-based SCM. Many companies find themselves with a short-term need to rationalize their move to the cloud. The best SCM systems help you extract more value from your current assets.
Traceability and trust with blockchain
You need to know what’s taking place in every aspect of your supply chain at all times. Intelligent SCM solutions give you that capability. When you’re considering SCM solutions, look for a system that uses blockchain to make visibility and insight easy for you. This ensures traceability, repudiation, and trust throughout your supply network.
The food industry in particular stands to benefit greatly from this type of SCM.
The future of Supply Chain Management
The supply chain of the future is all about responsiveness and the customer experience.
. The entire SCM planning function will become more intelligent to take consumer demands into account. The ability to adapt will be a mandate.
In the past, supply chain planning has been a periodic business exercise. Heading into the future, it will be continuous. The need for speed and accuracy in SCM is only going to increase. Make sure your supply chain is ready for the future by supporting it with an intelligent SCM system.
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