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Understanding Supply Chain Management: Key Stages and Processes

Supply chain management (SCM) is essential for transforming raw materials into final products. It consists of five key stages: Plan, Develop, Make, Deliver, and Return. A successful SCM strategy focuses on effectively planning to satisfy customer needs, fostering strong supplier relationships, and facilitating the logistics of product delivery. Additionally, it encompasses managing facilities, inventory, transportation, and accurate information flow. By optimizing these elements, a company can improve its supply chain performance and ensure customer satisfaction.

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Understanding Supply Chain Management: Key Stages and Processes

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  1. PRAVENDRA KUMAR

  2. What is SCM? • A supply chain is the collection of steps that a company takes to transform raw components into the final product. • Supply chain management is comprised of five stages: • Plan • Develop • Make • Deliver • Return

  3. A plan or strategy must be developed to address how a given good or service will meet the needs of the customers. A significant portion of the strategy should focus on planning a profitable supply chain.

  4. Develop • It involves building a strong relationship with suppliers of the raw materials needed in making the product the company delivers.

  5. Make and Deliver • The product is manufactured, tested, packaged, and scheduled for delivery. Then, at the logistics phase, customer orders are received and delivery of the goods is planned.

  6. Returns • Return of defective goods • The company will also address customer questions in this stage.

  7. Facilities. • Facilities are the actual physical locations in the supply chainnetwork where product is stored, assembled, or fabricated. • Inventory. • Inventory encompasses all raw materials, work in process, and finished goods within supply chain. • Transportation • Transportation entails moving inventory from point to point in the supply chain. Drivers of the supply chain performance

  8. Drivers of the supply chain performance • Information • Information consists of data and analysis concerning facilities, inventory, transportation, costs, prices, customers throughout the supply chain. • Pricing • Pricing determines how much a firm will charge for goods and services that it makes available in supply chain.

  9. Process view of supply chain process • Customer order cycle • Replenishment cycle • Manufacturing cycle • Procurement cycle • Push/pull view of supply chain process

  10. Role of IT in SCM • Information must be accurate. • Information must be Accessible in a timely manner. • Information Of the right kind. • Examples – Bar codes etc

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