In the world of business, looking through financial flows must be one of the top priorities to keep one’s business afloat. Some business owners, however, is not aware of the value of supply management and how big its role in delivering a good amount of investment to a company. Let’s shed some light on the context of the value of supply chain management.
Let’s begin with the meaning of Supply Chain Management. In times when market behavior fluctuates managing the flow of goods, raw materials and finished product from origin to distribution must be given attention. So, Supply Chain Management (SCM) is the monitoring of the course of supplies, from purchasing raw materials to the distribution of the finished product.
Any investment is subject to risk, from natural calamities to man-made. Beginning from the purchasing point up to the delivery of goods, so, managing the procession of procurements, purchasing, production and distribution is what Supply Chain Management is all about.
In other words the context of SCM begins with planning. Planning which suppliers and acquisition of product to choose evaluated and selected, planning involves vendor’s selection, material selection, canvassing prices and even outsourcing to reduce additional manpower, without upsetting the worth of the raw materials. Identifying the cost to meet the need of production and issues like quality control and labor must be taken into consideration without jeopardizing the quality of the product.
Second context of Supply Chain Management is making contracts to the agreed supplier of how, what and mode of business the two must agree upon. It also includes physical process of transfer of raw materials, duration and risk evaluations.
The purchasing power of the company on this area must be keen on the lead of benefits on the side of the company to control additional or unexpected overhead expenses. Like for instance the delivery of raw materials must be from the point of origin to the company’s warehouse.
Most often, this scenario is frequently undermined. Since, suppliers of raw materials drop off their products only on ports, and company has to pick it up from that point wherein additional expenses are incurred through transportation.
Thirdly, Calculate Benefits which includes quantitative and qualitative analysis of the cost and profits. Practically, all business aims for profit, so a well calculation must be done. From the point of purchasing to delivery calculating all expenditures must not exceed that may result to a break even or losing side.
For clarity, SCM is the management of the flow of goods, which includes the movement and storage of materials, work-in-process accounting, and finished produce from origin to point of consumption. Simpler form, SCM can be rolled into a task of planning, designing, accomplishing, regulating and monitoring the chain of supply and its undertakings with the primary goal of attaining a good return of investment (ROI). Supply chain management draws from the area of operation and procurement division
This is the reason why every procurement professional should have a strong foundation in supply chain. If you want your business to become more profitable, a certification course in Supply Management is the answer.
Join Jack Quinn Solutions, LLC offers a 3 to 5 days CPSM Certification Boot Camp that can equip every professional with the basics in supply chain management. The whole course is focused and fast paced with a goal to help you pass the Certification on Supply Chain Management by th ISM.