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Definition of Supply Chain Management (SCM)

Updated: Mar 29

Written by Abdullah almujathel

For Elite Consultancy & Training Services

SCM is how to manage the flow of materials and services including all processes that transform original raw materials into final products.

SCM contains the active rearrangement of a business's supply-side activities to maximize customer value and gain a competitive benefit in the marketplace.

Main elements:

  • SCM is the centralized management of the flow of goods and services, including all processes which transform raw materials into final products.

  • When managing SCM, companies can cut excess costs and deliver products to the consumer faster and efficiently.

  • Proper SCM saves companies out of the headlines and away from expensive reworks and claims.

  • 5 most critical elements of SCM are developing a strategy, sourcing raw materials, production, distribution, and returns.

  • A supply chain manager assigned in controlling and reducing costs and avoiding supply shortages.

SCM is the activities by suppliers to design and implement supply chains that are as efficient and economical as possible. The supply chain covers all activities from production, product development to the information systems needed to direct these activities.

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