| Supply Chain Management is a decisive element | | | | planning, sourcing, production, delivering, |
| of good overall business management. To | | | | and accepting returns. Each of these elements |
| ensure profits, customer satisfaction, | | | | is critical for a business to flourish. |
| repeated sales and future growth a company | | | | |
| needs to have an efficient supply chain | | | | The planning stage involves drawing up of |
| management for any type of sales. Thus, | | | | strategic plans for the company. These plans |
| goodwill building and corporate profitability | | | | or decisions are very critical for a company |
| are seriously dependent on it. As a | | | | as they allow a company to develop a strategy |
| discipline, supply chain management is | | | | for managing their production flow process. |
| gaining regard as more and more companies are | | | | The process of sourcing which is an extension |
| recognizing the significance of managing the | | | | of the planning process also plays a |
| network of facilities and distribution | | | | significant part in deciding the profits a |
| options that facilitate procurement of raw | | | | company is going to make. It is during this |
| materials, transformation of these raw | | | | phase that the company decides from where to |
| materials into finished products, and the | | | | procure the raw materials needed for the |
| distribution of these finished products to | | | | production. The company has to select a |
| the customers. | | | | supplier who gives it best quality raw |
| | | | material at the lowest possible prices, so as |
| A supply chain exists in every company | | | | to maximize its profits and provide quality |
| whether it is manufacturing products or | | | | finished products to the consumers. Managing |
| offering services. However, its complexity | | | | inventory of the goods and services a company |
| varies greatly from business to business. For | | | | receives from its suppliers is another very |
| instance, a company providing services may | | | | significant task involved in supply chain |
| have a lesser complex supply chain than that | | | | management. |
| of a company manufacturing products. Supply | | | | |
| chain management is undertaken basically to | | | | After planning and sourcing a company has to |
| fulfill the goals of an organization. These | | | | start production. This is the most important |
| goals can be both long term as well as short | | | | step in a supply chain. It includes all the |
| term. This term greatly influences the kind | | | | activities and decisions necessary for |
| of decisions taken for supply chain | | | | production, testing, packaging and |
| management. | | | | preparation for delivery. Delivery is the |
| | | | next phase to consider. It is generally |
| Supply Chain Management primarily encompasses | | | | referred to as logistics or shipping. In this |
| the processes by which raw materials are | | | | phase a company has to set up a proper |
| acquired and used to manufacture the end | | | | delivery mechanism, under which he has to |
| products. It also includes the processes | | | | develop a network of warehouses, pick |
| involved in the delivery of the finished | | | | carriers to get products to customers and set |
| goods, and the ability to process returned | | | | up an invoicing system to receive payments. |
| goods. Thus, the supply chain management | | | | Last but not the least element of the Supply |
| basically covers the issues related to | | | | Chain Management is the returns process. |
| planning, sourcing, producing, delivering and | | | | Customers are not always satisfied with the |
| servicing. Its fundamental purpose is to | | | | products, thus, every company should have a |
| ensure that the products can be produced and | | | | network for receiving the returned goods and |
| delivered in an efficient and profitable | | | | satisfying its customers. |
| manner. | | | | |
| | | | Mansi gupta recommends that you visit SCM & |
| The five primary elements which together | | | | Distribution for more information. |
| comprise the Supply Chain Management are | | | | |