Supply Chain Management (SCM) is a very broad business term, and covers a great variety of different managerial disciplines. In short, SCM refers to different managerial tasks when managing the full supply chain of any given organization. Each company or organization will have its own unique supply chain, and each company or organization will need to tackle its challenges in a unique way.
The scope of SCM is also very wide. Many managerial terms look heavily into company internal processes, whereas SCM encourages companies to look outside their own organization, and to optimize their corporation with counterparts from the entire network of the company. Therefore, SCM deals with optimizing not only company internal processes, but also with optimizing the collaboration with outside stakeholders of the company such as e.g. suppliers and vendors of the company’s products or services.
SCM is therefore taking a holistic view on the management of companies, in which companies are to optimize the entire supply chain, and to develop relations to outside partners that will potentially develop market advantages. The rationale of SCM is therefore to optimize the full supply chain, and to strengthen weak links in the chain for optimum performance.
A good starting point for assessing the main focus areas of SCM initiatives in a company would be to conduct a value chain analysis. By doing this, companies can actively discover the strengths and weaknesses of the current set-up of their supply chain, and proactively define which parts of the organization needs improvement for becoming or remaining competitive in the respective business environment of the company.
When this analysis has been conducted, managers may actively start performing SCM and start to work with optimizing relevant areas of the supply chain.
Basically, SCM can be split into three main focus areas that give a clear and unmistakable split into where improvements might be found.
- Upstream Activities
- In-house activities
- Downstream activities
All these activities represent their own respective part of the supply chain ranging from the initial suppliers and all the way to the end customer, and a proactive and successful management of all activities will potentially yield great results for all modern companies.
Please read through the related articles on the site to learn more about potential challenges and solutions for each activity listed above.