Supply chain management (SCM) is the process of planning, implementing, and controlling the operations of the supply chain as efficiently as possible. Supply Chain Management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption.
Supply chain management must address the following problems:

• Distribution Network Configuration: Number and location of suppliers, production facilities, distribution centers, warehouses and customers.
• Distribution Strategy: Centralized versus decentralized, direct shipment, Cross docking, pull or push strategies, third party logistics.
• Information: Integration of systems and processes through the supply chain to share valuable information, including demand signals, forecasts, inventory and transportation etc.
• Inventory Management: Quantity and location of inventory including raw materials, work-in-process and finished goods.
• Cash-Flow: Arranging the payment terms and the methodologies for exchanging funds across entities within the supply chain.

Supply chain execution is managing and coordinating the movement of materials, information and funds across the supply chain. The flow is bi-directional. Several models have been proposed for understanding the activities required to manage material movements across organizational and functional boundaries. SCOR is a supply chain management model promoted by the Supply Chain Management Council. Another model is the SCM Model proposed by the Global Supply Chain Forum (GSCF).

Successful SCM requires a change from managing individual functions to integrating activities into key supply chain processes. Supply chain business process integration involves collaborative work between buyers and suppliers, joint product development, common systems and shared information.

Supply Chain Management (SCM) Functions:

Related Terms: SCM, Supply Chain Management, SCM System, SCM components, Supply Chain Management functions