Supply chain management (SCM) is the management process by which raw materials are moved into an organisation, how they are processed internally into the finished products, and finally moved out of the organisation to the customer.
The theory behind Supply Chain Management encompasses the planning and management of the different stages of this process, and includes the sourcing, procurement, logistics and conversion of the products involved. Essentially it is about minimising costs, maximising efficiency, and meeting customer demand.
The activities involved in supply chain management can be grouped into the following areas:
Tactical
Strategic
Operational
Tactical
Contract sourcing
Managing production, contracting, and the scheduling of the process
Making decisions based on the inventory, namely quantity, location and quality
Implementing a strategy for transporting the goods
Comparison of all operations with competitors
Analysis of customer demand
Strategic
Optimisation of warehouses and distribution centers, including number, location, etc
Creating partnerships with suppliers and distributors, and maximising communication channels
Managing the product life-cycle, so new products can be integrated easily into the supply chain
Optimised IT infrastructure to assist operations
Ensuring the operational strategy is in line with supply strategy
Operational
Planning production and distribution channels
Scheduling the production down to the last minute
Planning for customer demand and forecasting future demand
Managing transportation of goods from suppliers
Managing the production operations
Managing external operations, including transfer of products to customers
