Supply chain management begins with the purchase of raw materials from a vendor and ends with the delivery of the finished product or service to the end user. It’s a web of people, organizations, resources, and processes that go into shaping/creating the ultimate product/service. SCM is the management of the flow of goods and services, and it entails operations such as logistics, lead time management, procurement, distribution, profit, resource optimization, planning, and analysis in the pursuit of efficient and cost-effective solutions. It entails actively simplifying a company’s supply-side operations in order to optimize customer value and achieve a competitive advantage in the market where it operates.
Supply Chain Management is a relatively new concept that encompasses the following activities,
Product Development, Procurement & Manufacturing, Logistics, Consumer Service, Performance Management, Integration & Information Sharing are just a few of the areas that need to be addressed.
Supply chain management has successfully revolutionized the industry’s face and is now regarded as the backbone of all industries, providing a wide range of social and economic benefits.
Importance to the Economy:
1. Decreasing costs:
A well-established Logistic Network Chain aids in the reduction of operating costs by ensuring timely product delivery, hence reducing the need for inventory to be held in stores or warehouses. As the logistic network chain attempts to optimize lead time delivery, order location, relocation, logistics, and reverse logistics, the costs of delivering goods to assembly plants, warehouses, and end consumers are reduced. It not only ensures the quality of materials in transit but also saves time and effort in the process.
2. Enhancing Financials:
Logistic network professionals are always on the lookout for the best network solutions. Once found, these alternatives not only help make sure a quicker cycle of payments through improved and faster delivery systems, but they also help to reduce the need for costly infrastructures such as buildings, warehouses, and storage. Profit is ensured through an efficient and effective supply chain, which boosts cash flow while lowering fixed costs, making the business more financially sustainable.
Importance in Society
1. It is the supply chain that keeps the economy operating by ensuring production and matching demand and supply, from the most basic things like food and water to the most opulent. But, above all, it keeps life running smoothly. SCM is the most important ally in modern surgery, and its effectiveness in a medical emergency can mean the difference between life and death.
2. It assures that cities, states, countries, and continents are all connected. A well-developed supply chain infrastructure allows seamless multimodal travel while also ensuring consumer affordability. As a result, people’s level of living and quality of life improve.
