Supply Chain Management is the act of optimizing all activities throughout the supply chain links and processes so that the products and services are supplied in the right quantity, to the right location, at the right time, and at the optimal cost.
Supply Chain consists of manufacturers, suppliers, transport management systems, warehouses, retailers and customers. Supply Chain Management (SCM) covers all activities that are needed while bringing a product into market. It also helps in reducing the total system cost that is to be spent by a company in order to satisfy customer requirements.
Why Supply Chain Management?
An effective supply chain management can bring up to 5% cost decrease and 30% increase in sales. Effective SCM also helps companies in making quicker decisions in answering questions like what is the best price to be charged for a product; whether the price of the product has to be changed if there is excess inventory; what all product parts should be bought from which all suppliers; in which factory should the product be manufactured etc.
Benefits of effective Supply Chain Management
Moreover proper supply chain management holds the key for future growth and future success