Supply Chain Management

What is supply chain management (SCM)?

Supply Chain Management covers the development and management of logistic chains (material and information flows) through the whole supply chain. This includes all fields starting with the raw material extraction and ending with the delivery to the customer.

So, the main task of supply chain management is to organize all processes, that contribute to the delivery of customers with goods, products or services, in the most economical way. SCM differs from logistics by the fact that it does not only cover physical obligations, but also accompanying activities such as order processing and money flows. Procurement, production and distribution are connected within the field of supply chain management, which ensures a seamless exchange of planning data. In this way, the different dimensions are aligned with each other and immediate action can be taken if a problem occurs.

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Tasks of supply chain management:

  • Planning of all processes along the value chain
  • Ensuring smooth material flow within a process and between processes
  • Supplier and customer support
  • Optimization of processes and process chains
  • Conception of cost reduction plans

Objectives of Supply Chain Management:

  • Reduction of storage costs
  • Reduction of inventories along the supply chain
  • Ensuring just-in-time deliveries
  • Ensuring and improving delivery reliability
  • Minimization of throughput times
  • Shortening cash-to-cash cycles

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