Question

What Are the Four Elements of Supply Chain Management?

Answer 1

Supply chain management is the third marketing process. It is very important in any business activities. Supply chain management includes the management of the flow of all information, products, materials and funds from the manufacture to the supplier, then to the wholesaler, retailer and finally to the customers to meet the customers’ demand.

The critical components of the supply chain management are: -

• Strategic purchasing - Strategic purchasing is nothing but the process by which the strategies are planned, implemented, evaluated and controlled and focus on managing the purchase decisions based on the activities involved in purchasing function. These activities of purchasing functions focus on the opportunities that will help the organization to achieve its long-term business goals. This process focus on improving the quality by making the interaction process between customer and supplier effective.
• Supply management - This focus on delivering the product or service to the customers. This is achieved by selecting suppliers so that they can minimize the cost and improve the quality of the products/ services they are delivering to the customers.
• Logistics integration - This can be done both internally and externally so that the products or services can be distributed to the customers.
• Supply network coordination - This focus on maintaining coordination among procurement, production and distribution so that various supply chain problems can be minimized or eliminated.

Hence connecting the suppliers, manufacturers, distributors and customers with the help of information system such as supply chain management software which helps in increase productivity, provide overall satisfactions, create good relation and minimize the cost is referred as supply chain management.