Definition of Supply Chain Management (SCM)

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Supply Chain Management (SCM) is the comprehensive management of sourcing raw materials, product development, production process, logistics, distribution channel along with the information and services required to reach the ultimate consumer with finished products.

The main focus of supply chain management is to maximize the value addition and minimize the cost of goods sold.

To do that SCM does the job of interlinking and coordinating among the different departments or organizations, who contributes to make the product marketable.

SCM plays its role by ensuring the proper flow of information among departments. So that they can make better decisions and work efficiently.

Supply chain management does the job of interlinking and coordinating the four major elements of supply chain, which are:

  • Integration
  • Operations
  • Purchasing
  • Distribution

In essence, supply chain management is involved in building a business model that integrates the business processes from product planning to sales forecasting and product replenishment.

At present, there is a lot of package software available for SCM. Among those SAP and i2 technology are famous.

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