Purpose and Function of Supply Chain Management

Supply chain management is abbreviated as SCM. SCM becomes the supply chain management or MRP which can manage the procurement of raw material, product, information, etc. needed by many companies. This SCM will deal with companies from the beginning to the end process effectively and efficiently. The physical network in supply chain management is that which includes all companies that have a role in the supply chain process. Examples are those that supply raw materials, produce goods, and even send them to end users. SCM itself is a way or system, or tool, etc. that can integrate and manage supply chain processes so they don't run late.

The purpose of SCM

There are several supply chain management objectives that are important for you to understand. According to Stevenson's experts, the aim of SCM is to align supply and demand effectively and efficiently. Besides avoiding various kinds of problems that can arise due to an integrated supply chain. Problems that often arise relate to the level of outsourcing, procurement management, supplier management, managing customer relationships, identifying problems and also responding to these problems, and finally risk management.

The strategic objective of supply chain management is to win market competition or at least survive in the market. To be a winner in the competition, you as a businessman must be able to provide products that are truly good and appropriate. The supply chain must also be able to provide products that are cheap, quality, on time, and also varied. If your product can meet that, then you can easily win market competition.

Optimization of SCM with Software

The many problems that can arise from supply chain management make you unable to do this SCM manually. SCM must be able to control the distribution network area starting from the number, location, supplier of production facilities, distribution centers, warehousing, and customers. In carrying out this supply chain process also must think of the distribution strategy that is carried out in order to be effective and efficient, besides that in the process requires integrated technology or software so the distribution process can run smoothly. With the help of technology or software, the distribution of price information, inventory, and also transportation matters can run smoothly. This SCM can also manage the terms and conditions of payment and methods.

SCM function

There are several common functions of this supply chain management. Most of its main functions are to plan or planning which functions to achieve the business goals. The second is that SCM is used as a coordination of all lines in terms of resources or the staff that make up the organization. The next function is to provide work instructions for resources or staff in the company to be able to carry out the plans that have been made.

The last function of SCM that is important for you to pay attention to is controlling and giving instructions. Control and checks will also be carried out to ensure that the instructions given are in accordance with established work standards. By looking at some of the functions mentioned above it can be concluded that SCM is included in a complex and busy field, so automation with the help of software is needed here.

What makes this supply chain difficult is the many processes that must be passed, ensuring that the goods have arrived safely in the hands of consumers and with a detailed payment system. Constraints that arise during the supply chain process can make delivery of goods late, so consumers will become disappointed. Use supply chain management to make the supply chain more effective and efficient.