Supply Chain Management (SCM)

Supply chain management (SCM) refers to the process of monitoring, coordinating and controlling the actual supply chain (value chain). This involves all materials, information and finances distributed across the supply chain along the entire value chain (purchasing, materials procurement, production, logistics, sales, end consumer). The goal of SCM is to optimize all resources along the logistical and manufacturing material flow.

The supply chain represents the path of a product or service to the consumer, including the value added at each stage of the process. In order to do justice to this added value and to continuously improve it, all material and production flows, from ordering and manufacturing to delivery, must be transparent.

Supply chain management: a transparent chain of information

Since the value chain is rarely limited to just one company, the monitoring and coordination of individual processes generally also involves separate partner companies. The challenge here is to ensure cross-company transparency of the information chain. That is why one component of supply chain management is what is known as supply chain planning. This makes it possible to optimize planning at three levels: internally, company-wide and across companies. At each level, the planning processes on the manufacturer and retailer side play a role.

To speak of cross-company and adaptive transparency, supply chain management must occupy a key position in the individual companies. This includes a deep integration into the corporate network, including all interfaces. If this is the case, all processes can be set in relation to each other and a complete overview of all value-added processes can be guaranteed. These include, for example:

 

 

Value chain management

The efficiency of a value chain can be determined with the help of computer-aided industry-specific comparative values, so-called key figures. Distribution centers in particular already rely on key figures that can be combined and analyzed across networks by all participating companies. In the future, value chain management will enable a large number of transition points (links to external processes and their key figures) to other systems, so that the overall flow is not negatively affected; but above all, modern supply chains will be able to operate worldwide. Local infrastructures will also be implemented globally. In the near future, it will no longer matter that globally effective processes produce different key figures. They will be available in one language (1).

(1) Warehousing 4.0, Christoph Glock, Eric Grosse, Technical Solutions and Management Concepts for Warehouse Logistics and the Future, page 145, Chapter 1.2 – Value Chain and Information Management.

For more information, see the articles: What is Supply Chain Management about? and The Cost of Missed Opportunities in Supply Chain Management.

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