Glossary
Supply Chain Management (SCM) as defined by the Council of Supply Chain Management Professionals (CSCMP )
Tags: Glossary
Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies. Supply Chain Management is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-performing business model. It includes all of the logistics management activities noted above, as well as manufacturing operations, and it drives coordination of processes and activities with and across marketing, sales, product design, finance, and information technology.
What is Supply Chain Management (SCM) as defined by the Council of Supply Chain Management Professionals (CSCMP )?
Supply Chain Management (SCM) is a crucial aspect of modern business operations. It involves the planning, coordination, and management of various activities that are essential for the smooth flow of goods and services from the point of origin to the point of consumption. The Council of Supply Chain Management Professionals (CSCMP) defines SCM as the integration of supply and demand management within and across companies, encompassing sourcing and procurement, conversion, logistics management, and coordination with channel partners.
One of the key components of SCM is sourcing and procurement. This involves identifying and selecting suppliers, negotiating contracts, and managing relationships with them. Effective sourcing and procurement ensure that the right materials and components are obtained at the right time and at the right cost, contributing to the overall efficiency of the supply chain.
Conversion refers to the transformation of raw materials into finished products through manufacturing or production processes. SCM encompasses the management of these operations, ensuring that they are carried out efficiently and effectively. This includes optimizing production schedules, managing inventory levels, and implementing quality control measures to meet customer demands and maintain product quality.
Logistics management activities are another integral part of SCM. This includes the planning, implementation, and control of the movement and storage of goods, from the point of origin to the point of consumption. Logistics management involves activities such as transportation, warehousing, inventory management, and order fulfillment. By effectively managing these activities, SCM ensures that products are delivered to customers in a timely manner and at the lowest possible cost.
Coordination and collaboration with channel partners are essential in SCM. Channel partners can include suppliers, intermediaries, third-party service providers, and customers. SCM involves establishing strong relationships with these partners, sharing information, and collaborating to optimize the flow of goods and services throughout the supply chain. This collaboration helps in reducing costs, improving customer service, and enhancing overall supply chain performance.
SCM is an integrating function that links major business functions and processes within and across companies. It goes beyond logistics management and manufacturing operations, extending its influence to marketing, sales, product design, finance, and information technology. By aligning these functions and processes, SCM creates a cohesive and high-performing business model that drives efficiency, cost savings, and customer satisfaction.
In conclusion, Supply Chain Management is a comprehensive approach to managing the flow of goods and services from suppliers to customers. It involves various activities such as sourcing and procurement, conversion, logistics management, and coordination with channel partners. SCM integrates supply and demand management within and across companies, linking major business functions and processes to create a high-performing business model. By effectively managing the supply chain, organizations can achieve operational excellence, cost savings, and customer satisfaction.