Supply chain management, as the name suggests, refers to the management of flow of goods and services. In addition, the process also includes the management of transformation of raw goods into final product, and its distribution to the dealers so it reaches the end customer.
Not just that, SCM also involves the active streamlining of a business’s supply-side activities to maximize customer value and gain a competitive advantage in the marketplace.
Tu sum it all up in simplest words, supply chain management is a very essential component of a business which also influences the success or failure of it.
Talking about the primary functions of supply chain management, below are some that you must know.
- Acquiring Raw Materials: The first and foremost function of SCM is acquiring raw materials. Timely acquisition of raw materials ensures the production line continues to operate and deliver timely. The process of supply chain management synchronises the plant with the supplier to maintain inflow of goods without any delay.
- Ensuring timely Operation: The said process also helps in accurate demand planning and forecasting to avoid overstocking. In the present competitive world, a business has to predict the possible demand for its manufactured goods before placing a new order of raw materials.
- Streamlining Logistics: Before we tell you how SCM (supply chain management) helps you streamline logistics, the term refers to the activity of organizing the movement, equipment, and accommodation of troops. A business requires space to store raw materials and finished products, and logistics management, being an essential part of SCM (supply chain management), helps you with the right ways to use the available warehouse space to optimise inflow and outflow of goods with minimum delay.
Additional read: Function Of Supply Chain Management You Should Know