Supply Chain Management (SCM)

What is Supply Chain Management (SCM)?

Supply chain management is the control of the flow of goods and services and includes all processes that convert raw materials into final products. This includes actively optimizing a company's supply-side activities to maximize customer advantage and gain a competitive advantage in the marketplace.

How Supply Chain Management (SCM) Works

Supply Chain Management (SCM) The objective of suppliers is to develop and implement supply chains that are as efficient and economical as possible. The supply chain includes everything from manufacturing to product development to the information systems needed to run these businesses.

Typically, SCM attempts to centrally control or link the production, shipping, and sales of a product. By managing the supply chain, companies can reduce extreme costs and get products to consumers faster. It does this through tight control of the company's internal inventory of suppliers, internal production, distribution, sales and inventory.

SCM vs. Supply Chain

A supply chain is the network of people, companies, resources, activities, and technology used to manufacture and sell a product or service. A supply chain begins with the delivery of raw materials from a supplier to a manufacturer and ends with the delivery of a finished product or service to the end user.

SCM oversees every touchpoint of a company's product or service from initial manufacturing to final sale. With so many points along the supply chain that can add value through efficiency or lose value through high expenses, the right SCM can increase sales, reduce costs and impact a company's bottom line. Is.

SCM Example

Walgreens Boots Alliance Inc. saw the importance of SCM to its business and decided to transform its supply chain by investing in technology to streamline the entire process. The company has been investing in and revising its supply chain management process for many years. Walgreens was able to leverage big data to improve its forecasting skills and better manage inventory and sales management processes.

This includes taking on supply chain director Colin Nelson earlier in 2019. Their role is to drive customer satisfaction as the company grows its digital presence. Also, in 2021, the company announced that it would be offering free two-hour same-day delivery on 24,000 products in its stores.