What is SCM (supply chain management)?

Supply chain ERP is an integrated software system that manages supply chain operations including procurement, production, inventory, logistics, and order fulfillment. It connects departments, automates workflows, and provides real-time data to optimize efficiency, reduce costs, and improve delivery performance across the supply chain.

Then,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.

• Planning
• Sourcing
• Manufacturing
• Delivery
• Returns

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 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.

Strengthen vendor relationships

Procurement: Procurement is a subset of the entire supply chain management. Based on the demand plan, purchase orders are sent to suppliers to ensure they can meet quantity and delivery requirements.

Manufacturing: Manufacturing to plan production runs and ensure capacity to meet demand.

Inventory management: Optimize stock levels, increase inventory turns and reduce holding costs by tracking the status of all items throughout the cycle.

Order management: Sorting, prioritizing, and tracking orders fulfillment and shipping.

Customer service: Maintain consistent communication with vendors and customers.

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.

Demand forecasting

Advanced, automated demand forecasting allow companies to forecast demand more accurately, automatically optimize inventory levels efficiently, and replenish inventory accordingly.

Automated shipping

Automated shipping solutions eliminate some of the manual tasks in order fulfillment, automatically putting orders in queue. Shipping technology can be intricate like AI or as simple as installing infrastructure components

Robotics

Widely used in the supply chain to move materials or build products faster and with enhanced efficiency, advanced robots deployed in Supply Chain Management systems often enhance and streamline operations, such as detecting product defects and processing errors.

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.

AI and advanced analytics

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. Leading organizations increasingly adopt artificial intelligence technologies in their supply chain and advanced analytics to go through vast amounts of generated data.

Supply-chain-driven commercial growth

The supply chain will transform into a customer-centric function with a capacity to sense customer needs and wants and deliver a timely response.

Environmental and social commitments

Customer expectations around social and ecological sustainability will apply to the entire product life cycle. Buyers will speak with their wallets by purchasing only from companies and suppliers that demonstrate authentic achievement of commitments.

Real-time execution of supply chain processes

Organizations will grow their data capabilities to convert real-time data into real-time analytics and from real-time analytics to real-time decision making, enabling automated execution of key processes such as planning and inventory optimization.

Flexible work experiences

Supply chain organizations rapidly evolve towards full adoption of automation technologies like robotics and AI that support human-to-human and human-to-machine interaction, allowing managers to measure performance based on performance.