Do you know how it is possible that a product reaches our hands? This process is what is known as Chain Supply Management or SCM (in English, Supply Chain Management ) is essential to understand and to address any business strategy. Before seeing how to optimize the supply management chain and the benefits it will bring to your company, it is necessary to define what it consists of. Keep reading! It may interest you: MBA in Digital TransformationWhat is Supply Chain Management SCM or Supply Chain Management Following the definition of the Council of Supply Chain Management Professionals (CSCMP) by “supply chain” we understand: the different links that occur in a company, ranging from raw materials not processed to finished products that reach the final consumer.SCM is the life cycle of a product or service, from its conception to its consumption. China Business Phone List A subsystem within the organization that encompasses the planning of the activities of: supply, manufacture and distribution of products. Ultimately, the supply chain encompasses supply and demand, inside and outside the company.Phases of the Supply ChainDuring the processes that occur in the Supply Chain there are various links (purchasing, supply, inventory management, transportation, maintenance …). Actors such as: suppliers, manufacturers, distributors, wholesalers, retailers and clients or end consumers participate in them.All of them work hand in hand so that we can enjoy a certain product or service. But what phases do we differentiate in the Supply Management Chain ? Supply . How and where do we obtain raw materials?
Manufacturing. Convert these raw materials into finished products Distribution. The final product is transferred to shops, factories and places of sale so that it can be purchased by the consumer.The Supply Chain is present in each phase of the process of a product or service, encompassing all management and logistics activities. What for some may be the final product , for others it may be the intermediate product or even the raw material.
The traditional SCM concept is obsolete. Companies must supply a global market, serving clients from countries with different demographic characteristics, different legislation, different language, and so on. The SCM 2.0 integrates and standardizes all this information and all processes by providing companies the flexibility they need to adapt to a global environment increasingly changing.On the one hand, those responsible for the organization will obtain the information they need in real time, improving the decision-making process. By having a more solid information base and in real time, decisions will be made at the right time, gaining the flexibility that companies need.Regarding consumers, Supply Chain Management 2.0 allows us to analyze the preferences of our clients , anticipating market demand and adapting the commercial strategy based on this demand and our product availability.
SCM 2.0 is also in charge of warehouse management, adapting the stock of merchandise and purchase orders to customer demand.
In this way, maintaining a safety stock is minimized, reducing warehouse costs.Thus, it is possible to carry out a complete traceability of our products , from their entry into our warehouse as raw materials until their delivery to the end customer. Therefore, it improves the overall efficiency of the production chain .TYPES OF SUPPLY CHAIN OR SUPPLY CHAIN There are different types of supply chains. These are usually the following:Although many link the Supply Chain with the concept of logistics, the truth is that there are differences between the two. According to the CSCMP , logistics implies the planning and control of all activities related to the supply, manufacture and distribution of the goods and services of a company; For its part, the SMC is the chain that connects any company from the acquisition of raw materials to the delivery of the finished product.
It is common to confuse the terms Logistics and Supply Chain , since both have to do with the management of business models. The most important difference is that logistics is just one part of the Supply Chain.The logistics is delivering the product to the place, time, quantity, cost and quality right agreed with the client.Let’s see the differences with the Supply Chain:
SCM consists of planning the activities involved in the search, obtaining and transformation of products, be they suppliers, intermediaries, officials or clients. Bank Email List The Supply Chain supplies and regulates manufacturing, distribution, marketing, sales, product design, finance, and technology operations.One of the important aspects of the Supply Chain is synchronization , since any failure would create a chain effect causing bottlenecks and blockages.The Logistics is the set of means and methods that allow to carry out the organization of a business or service.The role of logistics is to efficiently implement and control materials and products, from point of origin to consumption. The objective is to satisfy the needs of the consumer at the lowest possible cost.
Logistics studies how to place goods and services in the right place , at the right time and under the right conditions. This allows companies to meet the requirements of their customers and obtain the highest possible profitability.Logistics management is a very important part of the Supply Chain. It controls the efficiency of transportation , fleet management, warehousing, material handling equipment, and order picking operations.Importance of good supply chain management Once these concepts are clarified, we will see why it is good to implement an effective supply management chain. We detail what are the benefits it generates:
Customer loyalty. Thanks to the efficiency in production processes, customer service improves delivery time or purchase conditions. This causes customers to have the brand in mind when they think of these certain products. If the shopping experience is satisfactory, they will repeat .Better control. With the defined process, we can know in real time where the product is in the chain. This allows greater control with external actors such as suppliers. This way we can quickly and easily access more offers. In addition, it allows you to track the dates of inputs of supplies, production, distribution dates, etc.
As a consequence, small conflicts or everyday problems are reduced.
More profitability. All supply chain operating costs are reduced by 20-30%.
Improves competitiveness and allows reaching new markets.
Leadership. A good implementation of the supply chain leads to good results for an organization. It will also make you stand out in the market as a leading company. Customers play a decisive role, if they choose you they will end up becoming a benchmark.
Greater unity in the team. Each actor knows their roles, when to carry them out, and the importance of teamwork. They work like a chain: each piece is key so that the product reaches customers in the best conditions.
Knowing how to manage change and decision-making in VUCA environments is essential today, as well as consolidating digital knowledge and skills. If you also want to become an expert in digitization, don’t miss the MBA in Digital Transformation . We will wait for you!