Supply Chain Management: What Does It Really Mean?

We’ve all heard the term “supply chain management“, but what does it really entail? According to Investopedia, supply chain management is defined as “the management of the flow of goods and services and includes all processes that transform raw materials into final products. It involves the active streamlining of a business’s supply-side activities to maximize customer value and gain a competitive advantage in the marketplace.” Now that you know what supply chain management is, let’s discuss how companies utilize this service.

How does supply chain management work?

SCM is a central control system that links the production, shipping, and distribution of a product. Companies can reduce costs and get products to consumers faster by managing their supply chain. This can be achieved by tighter control over internal inventory, production, distribution, sales, as well as the inventories of vendors.

SCM is based upon the belief that almost every product that makes it to market comes from the efforts of many organizations that make up a supply network. While supply chains have been around for centuries, companies have only recently begun to see them as an added value to their operations.

Supply chain management companies coordinate the logistics through five major steps.

Plan & Strategy

Source

Manufacturing

Delivery & Logistics

Returns

Supply chain management companies use those five steps to be successful. These companies help thousands of people every day in regards to getting things shipped and received.

As global competition becomes more intense, businesses seek to reduce manufacturing lead times and collaborate better with supply. Consider hiring a supply chain management company today if you need solutions!

United Defense Logistics Solutions is a supply chain management company that provides logistical solutions all across the United States and beyond.

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