Supply Chain Management (SCM) refers to the management of the flow of goods and services from the acquisition of raw materials, manufacture, and processing of work-in-progress to come up with finished products ready for consumption. It entails the coordination of all processes involved from the time raw materials are acquired up to when it reaches the consumer as an end product. As simple as the process may sound, it involves several complex interlinked networks therein.
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SCM incorporates 3 major concepts which are:
ü Business Processes
ü Network Structure
Business processes involve the flow of goods, services, and information from the consumer to the supplier. Some of the processes include:
1. Order Processing– this is whereby the consumer makes known the specifics of a commodity he/she wants from the supplier. These specifics may entail shape, color, quantity, and design. The supplier must meet the specified needs of the consumer to enhance consumer satisfaction and competitiveness in the market.
2. Distribution– After an order is placed, the supplier should make sure the commodity is transported from the factory to various retail centers where the consumer can easily access the goods. This involves effective transportation and warehousing.
3. Customer Services– this entails things such as after-sales services.
4. Product Development– In case the supplier introduces a new commodity to the market, it is their obligation to make sure this commodity is known to the consumer. The best way being through advertisement and marketing of the product.
The concept of network structure portrays 3 major players in the Supply Chain Management, that is, the supplier, organization, and consumer. The supplier's key role is to provide the organizations with the necessary resources and information that they will use to avail commodities to the consumers.
The concept of management is incorporated with the business processes to address issues such as:
i. Customer Service Management– This is majorly creating rapport with the customers by ensuring the goals of the business are met as well as their customer satisfaction needs.
ii. Customer Relationship Management– This is whereby upon the supplier meets the customer’s needs there is positive feedback.
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