Supply Chain Management: Definition and Examples

What Is Supply Chain Management (SCM)?

Supply Chain Management (SCM) refers to managing the flow of goods and services along the supply chain.

Supply chain processes include manufacturing, inventory management, warehousing, and distribution or fulfillment.

SCM streamlines operations to help businesses gain a competitive edge and boost customer satisfaction.

Definition of Supply Chain

A supply chain refers to the network created between the suppliers and a company to sell or distribute products to the buyer.

Key Points for SCM:

  • Supply chain management involves centralized management of supply chain processes.
  • Supply chain processes involve operations from manufacturing a product to getting it to the end customer.
  • Supply chain management is required to operate a supply chain in an optimized way, including reducing costs and delivering items as quickly as possible.
  • SCM can also save organizations from lawsuits and recalls.
  • A supply chain manager’s job is to avoid supply shortages, control processes, and reduce costs.

What Are the Five Parts of SCM?

  • Developing a supply chain strategy
  • Sourcing raw materials
  • Manufacturing
  • Distribution
  • Returns

In other words, supply chain management includes logistics in addition to the creation of products from raw materials and fulfillment.

What Does a Supply Chain Manager Do?

A supply chain manager looks after the entire supply chain process to reduce costs and minimize the shortage of products. They oversee all supply chain and logistics operations to make sure that the company’s efficiency and productivity is not compromised under any circumstances.

Examples of SCM in Practice

An example of SCM is Walgreens Boots Alliance Inc., which decided to transform its entire supply chain process to streamline operations. The company invested in technology, such as big data, to enhance its operations and ensure robust inventory management processes and manage the company’s sales.

The company also hired a Supply Chain Officer in 2019 who invested in improving the company’s digital presence.

Other examples of supply chain activities include packaging, farming, designing, transporting, and manufacturing.

Supply Chain Management Software

SCM software must be able to handle your operations and connect to your other line of business systems. With Clarity’s eCommerce platform and integration solution, you can have all that and more. Here are some SCM systems we integrate with:

  • Oracle E-Business Suite
  • SAP

Check out our Integrations page for more

Importance of Supply Chain Management (SCM)

Supply chain management (SCM) helps in meeting the company’s objectives. Investing money in this department can ensure product quality, reduce cost, help in building a brand, and control the risk of recalls.

Furthermore, SCM aids in avoiding product shortages and inventory oversupply while handling the shipping procedures as well. Proper management of your supply chain can improve profit margins.

Ready to Get the SCM System You Need?

Clarity’s eCommerce platform has many built-in capabilities and can connect to any ERP, CRM, or SCM software. If you’d like to find out more, we offer a free discovery process where we go over your business’s needs to find out what solution would be best. Please feel free to contact us and schedule a complimentary discovery.