Question

Explain the fundamental concept of supplies chain management and illustrates critical of the process

Answer 1

Supply Chain Management:- Supply chain management, is the flow of materials, products, information, & services, including the storage & movement of products & raw material in the cycle. This is basically the relations of all the cycles which are needed in supplying an product/service from initial stage of its production/creation to final delivery by the consumer. This process involves the coordination & integration of all the flows of the material/services. It also involves optimization of related operations so that efficiency can be achieved & processes can be speed up, with keeping in mind the costs & quality measures.

Fundamental Concepts of Supply Chain Management:-

1. The most fundamental concept is the strategic coordination of business functions within an organization, so that maximum throughput can be achieved by integrating the demand & supplies.
2. Maintaining the raw materials & products readily available so that consumers demand can be met & demands can be fulfilled as per the needs & requirements.
3. Reduction of unnecessary processes & movement of products so that waste management can be done & efficiencies can be achieved.
4. Supply chain processes should be flexible enough, so that changes can be adapted & good instant needs/ requirements can be made.
5. Strategic sourcing of raw materials, resources, machines, supplies, services which all are needed to produce a complete product or service. Procuring everything whenever needed & as per requirement is an major concept of SCM.
6. Logistics management serves an organized platform which would be helpful in movement of services, finances, information, products from one place to another.
7. Quality & cost management, using techniques which are cost effective & also meet the quality measures.
8. Effective communication, using proper means of communication channels proper information can be passed as & when needed.

Criticalities of the Supply Chain Management:-

1. Setting up SCM department in an organization is an expensive affair, if not done properly, it may cost a company negatively.
2. Extensive & proper training to all the members so that work can be conducted meeting all the deadlines & agendas.
3. Planning, if not done properly havoc can be created & unnecessary increase in waste & unwanted cost will occur.
4. Inaccurate information can lead to failure of any chain management system. Any lag of information in any middle process would lead to failure of entire cycle.

Although Supply Chain Management has criticalities associated, if SCM conducted in an good environment with proper planning, adequate trainings, accurate information, strategic coordination….it can do wonders in terms of cost management, waste management, demand management, logistics & eventual profits for organization.