Supply chain management is the management of the flow of goods and services and includes all processes that transform raw materials into final products. It involves the active streamlining of a business’s supply-side activities to maximize customer value and gain a competitive advantage in the marketplace.
What is supply chain management and why is it important?
SCM is important because it increases competitiveness and customer satisfaction. In this day and age, SCM plays an integral part of a firm’s success. Efficiently running supply chains allow firms to quickly deliver products to the end-user for a low cost.
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Why Supply Chain Management important
Why Supply Chain Management important (SCM) is an important part of every organization, whether small or large. SCM is the active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage, according to Robert Handfield, Ph.D. SCM also deals with the movement and storing of materials needed to create a product, as well as inventory management, and keeping track of finished goods from where they were created to who they go to. Bottom line: there is no overstating the importance of Supply Chain Management.
According to SCM experts, it’s also defined as the design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally. The other areas that SCM is related to are operations, logistics, procurement, and information technology.
If companies use Strategic Supply Chain Management, the organization is then able to function at optimal capacity to provide and distribute various products and materials.