Supply chain management is a familiar term both in the workplace and in management and business training. But what is it exactly, and why is it so important?
Undertake supply chain management trainingSupply chain management (SCM) is used to manage the integral flows between various links around an organisation and improve them where possible. This entails the strategic coordination of supply chains in which effective collaboration with partners is essential, both within and outside of the chain.
Supply chain management is the coordination, integration and optimisation of integral flows such as materials, finances and information from the supplier to the manufacturer to the wholesaler to the retailer and ultimately to the end consumer. Therefore, supply chain management is about coordinating the logistics to a certain point, for example, the transport of goods to a factory. The matters involved include operational management, order placement, retention of stock at suppliers and the recipient, information processing, issuing of permits, staffing needs, financing and planning.
There is a distinction within SCM between the internal and external supply chains. The internal supply chain is primarily focused on a company’s internal business, such as sales and purchasing, production and storage of goods. By contrast, the external chain has to do with everything outside of the organisation, such as stakeholders, suppliers and customers. Supply chain management can therefore be applied to both of a company’s environments. The challenge for the supply chain manager is to ensure that the communications and processes between the various chains and stakeholders run as smoothly as possible.
Logistics and supply management are closely related to each other. SCM is the strategic coordination of supply chains. A long-term vision is created and all of the business units work together to create value for the customer. By contrast, logistics concerns the flow of goods from the suppliers through their own companies to the customer. All logistics activities are subdivided into material management and physical distribution management.
A supply chain is all of the activities and goods that pass between a supplier and a customer. The supply chain makes clear for the company where the materials for a product come from and which party delivers the materials concerned.
A supply chain manager is a specialist within an organisation who is responsible for creating an effective and efficient chain of goods and services from the supplier to the customer or end consumer. The supply chain manager focuses on both internal and external supply chains. These supply chains consist of all incoming and outgoing transport flows, storage and stock management, procurement, supply and expectation management, production, planning, order processing, customer service, quality control, product development, ICT, marketing and information systems. Supply chain managers can operate in various industries, and in principle can find a position in all companies that have a flow of goods or services between suppliers and end consumers.
A supply chain manager, also known as an integral chain manager, focuses on optimising the effectiveness of the chain. Supply chain managers plan, coordinate and monitor the flow of goods and services from the supplier to the end consumer within a company or institution. They also continually analyse and improve the associated processes. Among other things, they establish the most effective production planning possible (also in terms of costs), with the aim of keeping the stock levels within the company as low as possible while still being able to consistently meet customer demand.
In order to analyse and evaluate all of this, it is essential for the supply chain manager to be able to collaborate with all those involved within and outside of the organisation. They are therefore in close and frequent contact with suppliers, logistics employees and the procurement professionals.
Would you like to know how to effectively apply supply chain management in your company? Enrol in one of our courses to build up the knowledge you need to become a supply chain professional.
Did you know that we can provide all of our training programmes in-company? You and your team can undertake supply chain management training at your own location. This means you’ll not only be benefiting from the training, you’ll also be working on team building and saving on travel costs and time. Read more about our in-company training programmes.
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