Supply Chain Mangament (SCM) is the integration of key business proccesses from

Question

Supply Chain Mangament (SCM) is the integration of key business proccesses from intial raw material extraction to the final customer, including intermediate processing, transportation, and storage activites and final sale to the end customer. Today, the practice of SCM is becoming extremely important to achieve and maintain competitivesness. Many firms are just now beginning to realize the advantages of supply chain integration. Disuss the strategically important reasons for adopting supply chain management.

Explanation / Answer

The strategically important reasons for adopting supply chain management are, such as –

-          Business need to alter based on the dynamic nature of the fluctuating economies, product life cycles of shorter span and emergency situation in the markets. And it becomes very important to act on the immediate demand need or predicted demand needs based on the integrated supply chains and product innovation strategies. Thus, to remain highly efficient during dynamic conditions, it becomes more important to adopt SCM by the business.

-          Improvements in the day to day cost incurred in the business due to the actual customer needs, optimized inventories and storage space for the finished goods. Hence, reducing the cost effects is very important.

-          More collaboration with the various vendors and suppliers and most critical is the improvements in communication for the great deal of output and goals to achieve.

-          Increased return on investment and at the same time maximizes the business profit level with the adoption of newer technologies and improved approached to collaborate.

-          More real time picture of the business.

-          Lesser delays in any business processes to improve the throughput.

Hence, strategically SCM is needed for the continuous information and finance flow along with the enhanced product and material flow.

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