The Supply Chain Management (SCM)
This post is also available in: Deutsch (German)
Supply chain management (SCM) stands for the monitoring process as well as the coordination and control of the supply chain (value chain). This involves the allocation of all materials, information and the finances distributed along the supply chain to the entire value chain (purchasing, materials procurement, production, logistics, sales, end customer). The goal of an SCM is the optimization of all resources along the logistical and production material flow.
The supply chain stands for the path of a product or service all the way to the consumer, including the value-added in each process stage. Um dieser Wertsteigerung gerecht zu werden, sie kontinuierlich zu verbessern, müssen sämtliche Material- und Produktionsflüsse, von der Bestellung und Fertigung, bis zur Lieferung transparent sein.
Supply chain management: The transparent information chain
Since the value-added chain is rarely limited to just one company, the monitoring and coordination of individual processes generally involves partnership-based, but otherwise separate companies. The challenge here is the cross-company transparency of the information chain. One component of supply chain management is therefore supply chain planning. It enables optimization of planning on three levels: internal, company-wide and cross-company. At each level, the planning processes on the manufacturer and distributor side play a role.
To speak of cross-company and adaptive transparency, supply chain management must occupy a key position in the individual companies. This includes a comprehensive integration into the company network, including all interfaces. If this is the case, all processes can be set in relation to each other and a complete overview of all processes relevant to value creation can be guaranteed. These include, for example:
- Storage / Distribution
- Manufacturing / Production
- Order management / order processing
- Demand planning
Value Chain Management
The efficiency of a value chain can be determined computer-aided by, among other things, industry-specific comparative values, so-called key figures. Distribution centers in particular already rely on key figures that can be combined and analysed across networks by all participating companies. By means of value chain management, a large number of transition points (links to external processes and their key figures) to other systems will be made accessible in the future, so that the overall flow is not negatively affected; but above all, to enable modern supply chains to operate globally. Local infrastructures are also implemented globally. In the near future, it will not matter that globally operating processes produce different key figures on different levels. They will be available in one language (1).
(1) Warehousing 4.0, Christoph Glock, Eric Grosse, Technische Lösungen und Managementkonzepte für die Lagerlogistik und der Zukunft, page 145, Chapter 1.2 – Value-Chain- und Informationsmanagement.
For further information, please refer to the articles: What is Supply Chain Management about? and The costs of unused opportunities in Supply Chain Management.
Image source: Z_Amir – Fotolia.com