Supply chain management is the combination of art and science that goes into improving the way your company finds the raw components it needs to make a product or service, manufactures that product or service and delivers it to customers. The following are five basic components for supply chain management:
- Planning- Creating a strategy for managing all the resources that go toward meeting customer demand for your product or service.
- Sourcing-Choosing the suppliers that will deliver the goods and services you need to create your product or service; developing pricing, delivery and payment processes with suppliers ; creating metrics for monitoring and improving the relationships; putting together processes for managing inventory from suppliers (e.g. receiving and verifying shipments, transferring them to your manufacturing facilities and authorizing supplier payments.)
- Manufacturing . Scheduling the activities necessary for production, testing, packaging and preparation for delivery; measuring quality levels, production output and worker productivity.
- Delivery- AKA “logistics.” Coordinating the receipt of orders from customers; developing a network of warehouses; picking carriers to get products to customers ; setting up an invoicing system to receive payments.
- Return- Creating a network for receiving defective and excess products back from customer; supporting customers who have problems with delivered products.
Supply Chain Management Software helps business management to improve the supply chain byautomating and streamlining the steps outlined above and to reduce inventory by not over producing and by getting the product to the customer faster.