Supply Chain Management

Glossary

Supply Chain Management

Explain the meaning of supply chain management.

What is Supply Chain Management?

Supply chain management is a management method for coordinating and optimizing business processes involving multiple companies and organizations that form a supply chain. It is also abbreviated as SCM.

For example, in the case of a manufacturer, a supply chain is the series of steps that take place from parts and materials procurement → manufacturing → delivery → sales → consumption until a product reaches the consumer. Supply chain management integrates and manages functions such as order processing, production planning, inventory management, and transportation between the companies and organizations involved in this process, such as parts and materials manufacturers, factories, delivery companies, wholesalers/retailers, and distributors. Supply chain management shares the flow of goods, money, and information, strengthens collaboration, and leads to maximizing each company's profitability and improving customer satisfaction.

Successful implementation of supply chain management is said to bring benefits such as cost reduction, faster delivery, improved product quality, increased productivity, and optimized inventory levels.

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