Supply Chain Management

Supply chain management is one of the most important aspects of the logistics of any manufacturing business. By definition, supply chain management is the management of an interconnected network of businesses which play a part in the production, transport and delivery of goods to the consumer. 

Supply Chain Definition

A business that deals with the production, transport and delivery of services follow what is called a supply chain. A supply chain is the whole movement of products, information and money as it travels from production lines to its arrival at the hands of consumers. Supply chain management involves all aspects of the movement of materials, from storage to manufacturing and production to consumption, and even their reuse or proper disposal. Supply chains can be very simple, involving linear relationships with raw material providers, manufacturers, and distributors, or it can be very complicated, depending on the size of the business and the intricacies and number of products being made. The overall goal of an effective supply chain management system is a reduction in inventory, but this should never result to a shortage of products. When talking about customer pull, supply chain management is often referred to as demand chain management.

Importance of Supply Chain Technology 

With the popularity of web-based tools to make tracking more efficient, supply chain management systems are now using innovations in supply chain technology such as the use of two types of supply chain management software, specifically, planning application and execution application software. Planning application software uses complicated formulas to determine the best way to fill up an order while execution software tracks the physical status of goods, management of these goods and financial information passed from one party to another.

Three Types of Supply Chain Flows 

Supply chain management typically deals with three kinds of supply flows-product flows, information flows, and finances flows. Product flows refer to the movement of goods from the producer to the consumer, while information flows refer to the transmission of updates on the status of delivery.  Finances flows refer to the flow of credit terms, payments and payment schedules as well as consignment and arrangements for title of ownership.