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Supply Chain Management - Introduction

Supply chain management involves the flow of goods and services from raw materials to the end customer. It aims to efficiently coordinate production, distribution, and shipping. The goals of supply chain management are to minimize costs, match supply and demand, collaborate across partners, exceed customer expectations, and drive competitive advantage.

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Gajendra Singh Raghav
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61 views

Supply Chain Management - Introduction

Supply chain management involves the flow of goods and services from raw materials to the end customer. It aims to efficiently coordinate production, distribution, and shipping. The goals of supply chain management are to minimize costs, match supply and demand, collaborate across partners, exceed customer expectations, and drive competitive advantage.

Uploaded by

Gajendra Singh Raghav
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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11/13/2019 Supply Chain Management - Introduction - Tutorialspoint

Supply Chain Management - Introduction

Supply Chain Management can be defined as the management of flow of products and services,
which begins from the origin of products and ends at the product’s consumption. It also comprises
movement and storage of raw materials that are involved in work in progress, inventory and fully
furnished goods.
The main objective of supply chain management is to monitor and relate production, distribution, and
shipment of products and services. This can be done by companies with a very good and tight hold
over internal inventories, production, distribution, internal productions and sales.

In the above figure, we can see the flow of goods, services and information from the producer to the
consumer. The picture depicts the movement of a product from the producer to the manufacturer, who
forwards it to the distributor for shipment. The distributor in turn ships it to the wholesaler or retailer,
who further distributes the products to various shops from where the customers can easily get the
product.

Supply chain management basically merges the supply and demand management. It uses different
strategies and approaches to view the entire chain and work efficiently at each and every step involved
in the chain. Every unit that participates in the process must aim to minimize the costs and help the
companies to improve their long term performance, while also creating value for its stakeholders and
customers. This process can also minimize the rates by eradicating the unnecessary expenses,
movements and handling.

Here we need to note that supply chain management and supply chain event management are two
different topics to consider. The Supply Chain Event Management considers the factors that may
interrupt the flow of an effective supply chain; possible scenarios are considered and accordingly,
solutions are devised for them.

Supply Chain Management - Advantages

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In this era of globalization where companies compete to provide the best quality products to the
customers and satisfy all their demands, supply chain management plays a very important role. All the
companies are highly dependent on effective supply chain process.
Let’s take a look at the major advantages of supply chain. The key benefits of supply chain
management are as follows −

Develops better customer relationship and service.


Creates better delivery mechanisms for products and services in demand with minimum
delay.

Improvises productivity and business functions.


Minimizes warehouse and transportation costs.

Minimizes direct and indirect costs.


Assists in achieving shipping of right products to the right place at the right time.

Enhances inventory management, supporting the successful execution of just-in-time stock


models.

Assists companies in adapting to the challenges of globalization, economic upheaval,


expanding consumer expectations, and related differences.
Assists companies in minimizing waste, driving out costs, and achieving efficiencies
throughout the supply chain process.

These were some of the major advantages of supply chain management. After taking a quick glance
at the concept and advantages on supply chain management, let us take a look at the main goals of
this management.

Supply Chain Management - Goals

Every firm strives to match supply with demand in a timely fashion with the most efficient use of
resources. Here are some of the important goals of supply chain management −

Supply chain partners work collaboratively at different levels to maximize resource


productivity, construct standardized processes, remove duplicate efforts and minimize
inventory levels.
Minimization of supply chain expenses is very essential, especially when there are economic
uncertainties in companies regarding their wish to conserve capital.

Cost efficient and cheap products are necessary, but supply chain managers need to
concentrate on value creation for their customers.

Exceeding the customers’ expectations on a regular basis is the best way to satisfy them.

Increased expectations of clients for higher product variety, customized goods, off-season
availability of inventory and rapid fulfillment at a cost comparable to in-store offerings should
be matched.

To meet consumer expectations, merchants need to leverage inventory as a shared resource


and utilize the distributed order management technology to complete orders from the optimal
node in the supply chain.

Lastly, supply chain management aims at contributing to the financial success of an enterprise. In
addition to all the points highlighted above, it aims at leading enterprises using the supply chain to
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11/13/2019 Supply Chain Management - Introduction - Tutorialspoint

improve differentiation, increase sales, and penetrate new markets. The objective is to drive
competitive benefit and shareholder value.

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