Supply Chain
Supply Chain Management (SCM): How It Works & Why It's Important

Supply chain management (SCM) is the process of managing the flow of goods and services to and from a business, including every step involved in turning raw materials and
components into final products and getting them to the ultimate customer. Effective SCM can help streamline a company's activities to eliminate waste, maximize customer value, and gain a competitive advantage in the marketplace.

5 Phases of Supply Chain Management
  • Planning: To get the best results from SCM, the process usually begins with planning to match supply with customer and manufacturing demands.
  • Sourcing: Effective SCM processes rely very heavily on strong relationships with suppliers. The raw materials or components meet the manufacturing specifications needed for the production of the goods.
  • Manufacturing: This is the heart of the supply chain management process, where the company uses its machinery and labor to transform the raw materials or components it has received from its suppliers into something new.
  • Delivery: Once products are made and sales are finalized, a company must get those products into the hands of its customers.
  • Returns: The supply chain management process concludes with support for the product and customer returns.