What is Supply Chain Management?

When we use the term supply chain management we refer to the process by which the supply sides of activities are streamlined in order to optimize customer value and in the process get a competitive edge in the marketplace. It is often abbreviated simply as SCM and is representative of the supplier's efforts to create and put in place supply chains that are economical as well as efficient. The whole process of production, development of products and the information systems which are vital for directing such activities are covered by supply chains.

Usually, the aim of SCM is to centrally control or link the process of shipment, production as well as distribution for individual products. Through effective management of supply chains companies are able to remove unnecessary steps and provide end-products way faster. This is achieved by tightly controlling internal production and inventories, sales along with distribution in addition to the inventories of the purchasers of the products of the company.

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The whole concept of supply chain management stems from the idea that almost all products coming to the markets are a sum total of the efforts of several organizations present in the supply chain. Though these have been in existence for much of the past it is only in recent times that adequate attention has been paid to these processes.

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