Supply Chain Management

Supply chain management is the management of the flow of goods and services and includes all processes that transform raw materials into final products. It involves the active streamlining of a business’s supply-side activities to maximize customer value and gain a competitive advantage in the marketplace.

The dynamic field of supply chain management has become increasingly important as more companies use supply chain strategies as a means of market differentiation. In a time of rapid technological change, you need to keep learning to keep up. That’s where QSG comes in.

The concept of Supply Chain Management (SCM) is based on three core ideas:

1. The first is that practically every product that reaches an end user represents the cumulative effort of multiple organizations. These organizations are referred to collectively as the supply chain.
2. The second idea is that while supply chains have existed for a long time, most organizations have only paid attention to what was happening within their “four walls.” Few businesses understood, much less managed, the entire chain of activities that ultimately delivered products to the final customer.
3. Supply Chains also move in reverse, which supports sustainability, resiliency, and ESG aspects of a company. Smooth running Return supply chains even improve the corporate image and number of sales.

The organizations that make up the supply chain are “linked” together through physical flows and information flows.

Three major developments that have brought SCM to the forefront of management’s attention.

First, organizations are moving towards a concept known as electronic commerce, where information transactions are automatically completed via Electronic Data Interchange (EDI), Electronic Funds Transfer (EFT), Point of Sale (POS) devices, and a variety of other approaches. The late 1990s and early 2000s saw the emergence of on-line “trading communities” that put thousands of buyers and sellers in touch with one another.

The second major trend is increased competition and globalization of businesses. The rate of change in markets, products, and technology is increasing, leading to situations where managers must make decisions on shorter notice, with less information, and with higher penalty costs. At the same time, customers are demanding quicker delivery, state-of-the-art technology, and products and services better-suited to their individual needs. In some industries, product life cycles are shrinking from years to a matter of two or three months.

Third, the information revolution has given companies a wide range of technologies for better managing their operations and supply chains. Furthermore, increasing customer demands and global competition have given firms the incentive to improve these areas. But this is not enough. Any efforts to improve operations and supply chain performance are likely to be inconsequential without the cooperation of other firms.

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