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It’s no exaggeration to say supply chains sustain life as we know it. The world has seen what happens when the unimaginable breaks them apart. SCM can put them back together.
Guide to supply chain management- When you stop and really think about all the products you use every day, the sheer variety and far-flung provenance of these goods seems almost miraculous. From simple products, such as grapes from Chile, to the most complex — smartphones from Korea or cars from the U.S. — the supply chains needed to take these products from raw materials to manufacturing and processing and ultimately to consumers are some of the most sophisticated systems ever built. And they’re almost always global.
How can something so complicated possibly be managed? That’s where supply chain management (SCM) — the discipline devoted to planning, controlling and executing the creation and distribution of products — comes in. SCM began a century ago in efforts to optimize manufacturing, and later the logistics of transporting and storing things. Then electronic computers made the math easier and more accurate, and digital networks speeded up the information flow and broadened and deepened the connections.
Supply chain management and computers have been intertwined ever since.
Goals of SCM
As supply chain management has matured and the technology that powers it advances, its importance to businesses operations keeps growing. The goals companies hope to achieve by using supply chain management to optimize the flow of goods and materials include the following:
- cost savings from acquiring goods and services as cheaply as possible and minimizing expenses on capital goods, such as inventory, facilities and equipment;
- efficiency that comes from avoiding waste and duplication;
- revenue increases when higher levels of demand can be met with sufficient supply;
- profit from lower costs and higher revenue;
- customer satisfaction from balancing supply and demand, and delivering the products consumers want;
