Define supply chain management systems and describe how they benefit businesses.
In short, supply chain management systems help businesses better manage relationships with their suppliers. Objective of SCM: get the right amount of products from the companies’ source to their point of consumption with the least amount of time and with the lowest cost. SCM provide information to help suppliers, purchasing firms, distributors, and logistics companies share information about orders, production, inventory levels, and delivery of products and services so that they can source, produce, and deliver goods and services efficiently. SCM helps organizations achieve great efficiencies by automating parts of these processes or by helping organizations rethink and streamline these processes. SCM is important to a business because through its efficiency it can coordinate, schedule, and control the delivery of products and services to customers.
Business benefits include: (Table 2.5)
Decide when and what to produce, store, and move
Rapidly communicate orders
Track the status of orders
Check inventory availability and monitor inventory levels
Reduce inventory, transportation, and warehousing costs
Track shipments
Plan production based on actual customer demand
Rapidly communicate changes in product design