In todays highly competitive market ,supply chain management (SCM) is very essential for business to sustain itself. Supply chain encompasses series of interconnected activities from sourcing raw materials to delivering finished products to customer. This involves sourcing , procurement , production , logistics and distribution of goods or services.
In other words the entire process of transforming raw materials into finished products and delivering it to end users.
Parts of Supply Chain Management (SCM)
- Sourcing :- Finding the right materials at the right price.
- Production :- Turning those materials into finished products.
- Logistics:- Getting those products to the right place at the right time.
- Distribution :- Delivering products to customers while managing inventory.
Importance of Supply Chain Management
- Competitive Advantage :- companies with streamlined supply chain can respond quickly to market changes and out perform competitors.
- Customer Satisfaction :- efficient SCM ensures products and services are available when and where customers want them. Thus making customers happy.
- Cost effective :- companies can save money on transportations inventory and productions cost.
- Sustainability :- it can help companies to minimize their environmental impact by reducing waste and transportation routes.
- Risk Management :- it helps companies to identify and mitigate risks like disruption’s in the supply chain or fluctuations in demand.
Challenges in Supply Chain Management
- Technology :- though it can improve efficiency but keeping up with the latest tools and systems can be challenging.
- Globalization :- increasing suppliers and customers base to multiple countries adds more complexity to SCM.
- Supply Chain Disruption :- lots of factors can disrupt supply chains making it hard for the companies to meet customers demands, Factors like ( natural disasters , political instability , pandemics )
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