Supply chain management is the ecosystem of connections between a company and its suppliers. This network includes different stakeholders, activities, people, entities, information, and resources.
Simply put, a supply chain network connects all elements and covers all the steps involved in getting products or services from their initial state to the customer, including functions such as development, manufacturing, marketing, operations, distribution, financial management, and customer service.
Supply Chain Management is about managing and uncovering ways to improve supply chain operations. It refers to the oversight and control of all company activities required to turn components and materials into finished goods, and distribution, delivery, and service processes required to deliver products or services to partners, customers, and end-users.
SCM provides centralized control for the planning, design, manufacturing, inventory, and distribution phases necessary to produce, distribute and sell a company’s products.
By orchestrating the synchronization between these core processes, SCM improves efficiency, reduces costs, increases productivity, and helps to adopt flexible approaches to respond to disruptions quickly.
Supply Chain Management best practices help to coordinate supply and demand across the various stakeholders in the supply chain and enhance the product quality to deliver a competitive advantage, leading to increased sales and revenue.
Supply Chain Management performance has a direct effect on the overall performance of any and every organization. Today’s business environment, characterized by unpredictability of supply and increasingly complex supply chains driven by global sourcing, multi-channel distribution, and widespread markets, rendered agile, resilient Supply Chain Management methods essential.
Poor Supply Chain Management puts the company at risk of costly delays, quality issues, and loss of reputation. Poor supply chain management can also cause compliance issues and legal consequences.
“Extended” refers to supply chain processes extending beyond company boundaries of customers, suppliers, and business partners to include more distant links to the individuals, organizations, and resources a company works with directly. For example, Tier 2 and 3 suppliers and the customers’ customers.
Information sharing among all stakeholders in the extended supply network offers significant advantages. A business with visibility into its extended supply chain can often predict future disruptions. Extended supply chain broadens the management scope beyond the business processes covering the supply chain, treating the entire network as part of it. Suppliers will have complete visibility into customer demand and ready their response plan, providing full inventory visibility and tending scheduling needs.
Supply chain digitization is a part of modernizing supply chain operations into digital processes by establishing an integrated, cross-functional pool of data gathered from internal and external sources across the supply chain, using automation and business intelligence. (e.g., sales data, POS data, competitor prices. etc.)
Simply put, the overall workflow of Supply Chain Management is split into three different categories: product, information, and finances. Every organization part of a supply chain works under one of these domains.
Product flow – includes the timely formation, storage, and delivery of goods in the supply chain, including quality assurance tests at every step of the product lifecycle.
The information flow handles the continuous process of sending and receiving purchase orders and updating delivery statuses. All other workflows depend on the accuracy of the information flow throughout the supply chain. The financial flow deals with payments, inventory management, billing, credit terms, and other workflows related to finance.
Enables better communication between vendors and the business, as both parties can easily access information about orders, deliveries, and payments. This leads to greater trust and collaboration, ultimately resulting in stronger, more successful partnerships.
ERP software provides a real-time view of all operations, targeting specific inefficiencies for better outcomes and obtaining vital performance indicators ranging from orders and fill rates to freight bill accuracy and customer order cycle times.
ERP helps create automated demand planning processes upon orders received. From Warehouse Resource Management to transportation of materials, team members can access real-time information about resources used in production and plan accordingly. Implementing procurement in supply chain management helps to reduce business expenses and increase overall profitability.
An ERP system automatically generates invoices sent directly to the customer as products are shipped and collects shipment and delivery data to ensure on-time delivery and customer satisfaction.
ERP Supply Chain Management processes help streamline coordination between businesses and vendors to meet mutual goals and reduce bottlenecks.
Rapid globalization, increased product complexity, and growing customer demands bring companies to adopt new technologies to transform their supply chain. Advanced tools and sensors allow companies to collect data throughout the product’s lifecycle at every checkpoint. Machine Learning (ML), Artificial Intelligence (AI), and advanced analytics help drive automation and deliver insights that promote efficiency and drive innovation.
According to Gartner’s Prediction of the Supply Chain Technology future, By 2024, 50% of supply chain organizations will invest in applications that support AI and advanced analytical capabilities.
Supply Chain Management Technology aims to improve product quality faster and help organizations improve and better serve their customers’ dynamic needs and requirements.
As industry 4.0 gains momentum, industry leaders must adapt to, analyze, and predict consumer demand on the go.
Check out our new personalization and automation features to enjoy a customized solution suite for enhanced business performance.
Priority ERP helps you put your customers – first, with a fully-integrated Supply Chain Management (SCM) module to help you deliver the right product to the right customer, on time and on budget. Priority‘s SCM module provides your business with a comprehensive set of tools that integrate supply chain management across your entire organization, enabling you to reduce the overall costs associated with supplying goods and services.
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