{"id":5856,"date":"2022-03-17T08:34:00","date_gmt":"2022-03-17T08:34:00","guid":{"rendered":"https:\/\/rackbeat.digitalpresent.mk\/what-is-supply-chain-management\/"},"modified":"2024-03-18T11:14:56","modified_gmt":"2024-03-18T10:14:56","slug":"what-is-supply-chain-management","status":"publish","type":"post","link":"https:\/\/rackbeat.com\/en\/what-is-supply-chain-management\/","title":{"rendered":"What is Supply Chain Management?"},"content":{"rendered":"

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When it comes to effective production, order management<\/a>, transparency, and value creation, Supply Chain Management (SCM) is one of the most important elements in your business’ production process.<\/span><\/p>\n

But what does “Supply Chain” mean, and why is Supply Chain Management so important? Give this post a read, and get the answers to all your questions about SCM.<\/span><\/p>\n

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What is a “Supply Chain”?<\/strong><\/h2>\n

“Supply Chain”\u00a0<\/strong>illustrates how the process surrounding product production looks, from farm to table – meaning from the product is produced, as it finds its way to the consumer as an order.<\/span><\/p>\n

Depending on which type of product we’re talking about, there are a lot of different ways to illustrate the supply chain. The first link in the supply chain is usually either the raw materials being hewn from the ground or the production of the product. What happens next, however, varies greatly depending on how the product has been produced and how it is distributed.<\/span><\/p>\n

A simple illustration of a supply chain can be found in a laptop. Here, the supply chain can be illustrated like this:<\/span><\/p>\n

    \n
  1. Manufacturing:\u00a0<\/strong>The first part in this chain is the production of the product – in this example, the laptop in the factory.<\/li>\n
  2. Wholesaler:\u00a0<\/strong>A wholesaler orders a large supply of laptops and sells them to a business, a consumer facing store.<\/li>\n
  3. Consumer facing store: <\/strong>The store resells the computers to the end user<\/li>\n
  4. End user:\u00a0<\/strong>The end users buy a laptop in the store, and is as such the last part of the chain.<\/li>\n<\/ol>\n

    The above supply chain is simplified, and the modern supply chain is often considerably more complex and developed. In reality, there are a lot of different types of supply chains, that can not be organized in steps like the one above.<\/p>\n

    A reason for this could be that the company is recycling old and used products. That means that the linear ways of looking at raw material extraction- and production-links are no longer accurate in describing the product’s journey.<\/span><\/p>\n

    Also read: What is a WMS – and why is it important?<\/a><\/p>\n

     <\/p>\n

    What is Supply Chain Management – and why is it important?<\/strong><\/h2>\n

    Supply Chain Management\u00a0<\/strong>(abbreviated to SCM<\/span>) is about strengthening the supply chain, and making your order management much easier, by optimizing the processes surround the different links in the chain.<\/span><\/p>\n

    In other words, this means that while doing Supply Chain Management, you are working to control and optimize the material- and information flows that stems from the raw material supplier (or the factory) to the end user. The goal of SCM therefore become optimizing links in the supply chain, which thereby streamlines your order flow and management, to create as much value as possible for the business.<\/span><\/p>\n

    There are many significant advantages to Supply Chain Management. Through SCM you can, among other things, achieve:<\/span><\/p>\n