Supply chain management (SCM) is the process of overseeing the flow of both goods and services. Depending on the business, SCM can include the movement and storage of raw materials, in-process inventory and finished goods. There are five main factors that make up SCM.
Plan
The first thing your business has to do to implement SCM is come up with a plan. The strategy made has to take in account customer demand, possible risks along the supply chain route, efficiency and how to deliver high quality to customers.
Develop
The development part of the process is where your business makes strong relationships with suppliers. It also entails identifying reliable methods for shipping and payment. This part of the process may include some trial and error until you come up with the most cost effective solution.
Make
During this phase, the product is actually manufactured, tested, packaged and scheduled for delivery. It is a part of SCM because supply chain managers have to take into account the time necessary for all of these activities.
Deliver
Another step in the process is the delivery of the goods. This step is commonly referred to as logistics. The business has to figure out the best way to get their products to their customers in a reliable way.
Return
The final step is only necessary if the product was not to the customer’s satisfaction. This step is the returning of a defective product.
SCM
These are the five main parts of supply chain management, however the steps is not everything. Part of SCM is also making sure that each of these steps is as efficient as possible. There are third-party logistics companies that can help your business achieve the best supply chain management possible. A good supply chain means that your customers will receive high quality products in a timely fashion. You need to have good SCM in order to run a successful business. If you feel that you need some help with your business’s SCM, try talking to a third-party logistics business today.
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