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‘Supply Chain Management’ is also called the art of management of providing the ‘Right Product, At the Right Time, Right Place and at the Right Cost to the Customer’. Supply Chain Strategies are the critical backbone of business organizations today. Effective market coverage, availability of products at locations which hold the key to revenue recognition depends upon the effectiveness of Supply Chain Strategy rolled out. Very simply stated, when a product is introduced in the market and advertised, the entire market in the country and all the sales counters need to have the product where the customer is able to buy and take delivery. Any glitch in the product not being available at the right time can result in drop in the customer interest and demand which can be disastrous. Thus, design of transportation network and management assume importance to support sales and marketing strategy.
Inventory control and inventory visibility are two very critical elements in any operations as these are the cost drivers and directly impact the bottom line in the balance sheet. Inventory means value and is an asset for the company. Every business has a standard for inventory turnaround that is optimum for the business. Inventory turnaround refers to the number of times the inventory is sold and replaced in a period of twelve months. The health of the inventory turnaround relates to the health of business.
In a global scenario, the finished goods inventory is held at many locations and distribution centers, managed by third parties. A lot of inventory would also be in the pipeline in transportation, besides the inventory with distributors and retail stocking points. Since any loss of inventory anywhere in the supply chain would result in loss of value, effective control of inventory and visibility of inventory gains importance as a key factor of Supply Chain Management function.
A Supply Chain is a system of organizations, people, activities, information and resources which are involved in moving a product or service from Supplier to Customer.
As per definition, SCM is the management of a network of all business processes and activities involving procurement of raw materials, manufacturing and distribution management of Finished Goods. SCM is also called the art of management of providing the Right Product, At the Right Time, Right Place and at the Right Cost to the Customer.