Efficient and effective Supply Chain Management (SCM) is integral to business su

Question

Efficient and effective Supply Chain Management (SCM) is integral to business success. SCM functions to integrate all of the business processes required to deliver products to the customer. Regardless of the size or type of business, SCM can increase a company’s ability to compete through aggregate planning and management of operational processes required to turn raw materials into a finished product.

In what ways does business process integration contribute to the efficiency and effectiveness of supply chain management?

What is Supplier Relationship Management (SRM)? How is it used to select and manage suppliers?

What is the strategic benefit of SRM to the organization? To the supplier?

Explanation / Answer

SCM is very important for any production and business. With out this, no company can produce product in time and with correct cost. SCM is directly related to SRM which is supplier relationship management. To get good quality raw material and timely receipt of raw material we have to have good assocation with supplier and can be taken following measures to keep heathly and long business relationship.

1) to give projection of raw material required for atleast 3 months so that he can also plan the raw material accordingly and donot delay the supply of raw material to you.

2) If you are giving projection in advance by 3 months then you can get good price from supplier becuase he can also hedge some raw material like Copper and other metals which keeps on changing as per LME ( London Metal Exchange) rates. You can get good price from supplier if you give payment in advance.

3) incase of any urgency of raw material, supplier will work extra hard to supply you raw material as early as possible.

4) Also while ordering company should always follow MOQ level to get better prices.

5) There is should be some programe like Supplier relationship management in which he can give his feedback and also file complaint if any.

By doing above, any company can improve the efficiency of any supplier and can get good quality raw material in time with competitive prices.

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