What is SCM (Supply Chain Management)?
At its most basic level, supply chain management (SCM) is managing the flow of goods, data and finances related to a product or service, from procurement of raw materials to delivery of the product to its final
destination.
Although many people equate supply chains with logistics, logistics is actually only one component of the supply chain. Today's digital-based SCM systems include material handling and software for all parties
involved in product or service creation, order fulfillment, and information trackingsuch as suppliers, manufacturers, wholesalers, transportation and logistics providers, and retailers.
Supply chain activities include procurement, product life cycle management, supply chain planning (including inventory planning and maintenance of company assets and production lines), logistics (including transportation and fleet management), and order management. SCM can also include activities around global trade, such as managing global suppliers and multinational production processes.
History of SCM
Supply chains have existed since ancient times, starting with the first product or service created and sold. With the advent of industrialization, SCM has become more sophisticated, allowing companies to do a
more efficient job of producing and delivering goods and services. For example, Henry Ford's standardization of car parts was a breakthrough that enabled the mass production of goods to meet the demands of a growing customer base. Over time, incremental changes (such as the invention of computers) have brought additional levels of sophistication to SCM systems. However, generation after generation, SCM has remained essentially a linear, isolated function managed by supply chain specialists.
The internet, technological innovation and a booming, demand-driven global economy have changed all that. Today's supply chain is no longer a linear entity. Instead, it is a complex collection of different networks that can be accessed 24 hours a day. At the heart of this network are consumers who expect their orders to be fulfilledwhen they want it, on their terms.
What is SCM (Supply Chain Management) Software? (1:47)