Supply Chain Management (SCM) can be defined as management of the whole value-added chain, starting from the supplier, manufacturer, retailer and the final end-user. It can also explained as a collection of assets like components, manpower, relationship between customers and suppliers; an entire process that take place between delivering a customer's product from raw material to finished product as proficiently as possible.
For any business firm, developing and having a proper supply chain plays a vital role for smooth business transaction process and it is SCM that further helps in streamlining the interaction of all participants down the supply chain.
Today the importance of SCM solutions is growing gradually and many organizations are using this technology to manage supply chain more effectively. Emerging as backbone of service economy, it makes a business run more effectively by enabling mutual aid across different well-designed departments in an enterprise environment that further includes the organization and it's suppliers. SCM software contains features that also help companies in managing inventory, tracking sales and handling payments successfully and see where their shipments are. Apart from this, SCM also aid in reducing the waste out of supply chains by facilitating trading partners share supply-demand forecasts, production schedules, and inventory reports.
As per present circumstances, it has become very essential for every firm to have timely and precise supply chain management information as it help firms in manufacturing and shipping only as much product as there is demand in the market. It further helps companies in reducing the amount of inventory they keep. Looking at the current picture the competition is tough and to be a frontrunner in the competition many organization big or small have started concentrating on supply chain procedure. An increased competition has forced many firms to have a thorough look on demand & supply chain, and sales forecasts. It is very important to understand that higher the forecasts, lesser will be inventory and when this information flows along the chain, automatically increases the competence of the system.
Thus the SCM software allows better clarity by connecting the system with that of the vendor's and allowing document exchange. Moreover the most essential point to notice is the success of SCM software solution directly depends upon its implementation. As a result the execution of supply chain system must involve tactical planning, system examination and supply chain coordination.
Installing an SCM solution that provides the projected return on investment also requires that the servers and enterprise network infrastructure work together flawlessly. Finally, it also requires integration of data across several geologically detached supply chain associates and effective deployment of end-to-end dedicated bandwidth that has the potential to deliver quality service.
