Supply chain management can be defined as the management of a set of businesses or business activities which are linked together and which aim for the eventual provision of a specific product or a set of specific services to the consumer market. Management supply chain is a phenomenon which has been linked to the strategic coordination between different departments and sub-divisions of a firm, which in turn is responsible for the delivery of certain products or services to the customer. This is the simple method the supply chain follows to ensure delivery on time. It is possible to keep track of the order by tracing the map.
A successful firm, therefore, is one which is able to successfully manage both the up-stream and down-stream flow of raw materials, information and all finished and in-process goods between suppliers, the sellers, the manufacturing facility and the end consumer itself. Management supply chain requires from managers an ability to channelize their resources in such a manner that all the different segments of their business work together effectively to create an addition to the customer satisfaction in a way which is both cost effective as well as long-term. Management supply chain demands that a manager must maintain the entire system in a way that not only lowers costs on the whole, but also increases efficiency with marked increases in responsiveness and value addition.
According to the proper definition of the term “Supply chain management,” it includes the organization and execution of all activities which are related to sourcing of raw material, to logistics and the actual production and manufacturing process itself. Therefore, in the supply chain system, all suppliers, manufacturers, service providers, laborers, and all intermediaries as well as the customers are important and crucial stake holders who play an essential role in the development of the end product. It is therefore essentially a cross functional system which manages the inflow of raw material, the process of manufacturing which will turn the raw material into finished goods and the outward movement of these finished goods into the consumer market.
In the now extremely globalized economy with ever-expanding businesses, firms now usually use sophisticated supply chain management software which ensure that all matters relating to the successful management of the inter-related network of departments that are to be managed, are taken care of automatically at the touch of a few buttons. Due to this, firms today can now operate on larger than ever scales, with different facilities of a single business spread over a large geographical area, and it can be safely said that due to such management supply chain software, conglomerates are becoming more successful day by day. A company can have a manufacturing facility in China with warehouses in the Gulf region and corporate presence in the USA and still effectively work and integrate all business day-to-day activities easily due to the presence of an effective and standardized management supply chain system.
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It is also important to remember that while management may be related to the efficient handling of specific functions of business, management supply chain deals with the whole business as a one and the whole, with an eye at integrating all the functions together to form a cohesive structure that works towards the attainment of a specific goal.