Supply chain management

Supply chain management (SCM) involves the coordination and optimisation of the flow of goods, services, and information from raw material suppliers through to the end customer. This includes sourcing, procurement, conversion, and logistics management, both from a planning and management perspective.

The goal of SCM is to create value for the customer and to maximise efficiency and profitability for the organisation.

In the context of SCM, a push model refers to a system where production and distribution of goods are planned and initiated based on forecasted demand. In contrast, a pull model refers to a system where production and distribution are based on actual customer demand.

Differences between upstream and downstream

Upstream supply chain management (SCM) refers to the management of activities that take place in the early stages of the supply chain, such as sourcing raw materials and components. Downstream SCM refers to the management of activities that take place in the later stages of the supply chain, such as distribution and logistics.

There are several benefits to both upstream and downstream SCM. Upstream SCM can help an organisation to secure a stable and cost-effective supply of raw materials and components, which can help to reduce production costs and improve profitability. Downstream SCM can help an organisation to improve customer satisfaction by ensuring that goods are delivered on time and in good condition.

There are also risks associated with both upstream and downstream SCM. Upstream supply chain risk can include disruptions to the supply of raw materials due to natural disasters, political instability, or other factors. Downstream supply chain risk can include delays in the delivery of goods due to transportation issues or problems with distribution.

Information technology (IT) in supply chain management (SCM)

Information technology (IT) plays a critical role in SCM by providing tools and systems that support the planning, coordination, and optimisation of the flow of goods and information. For example, enterprise resource planning (ERP) systems can be used to manage and track the production process, while transportation management systems (TMS) can be used to optimise the movement of goods. In addition, supply chain visibility tools can be used to provide real-time visibility into the location and status of goods throughout the supply chain.

Supply chain management, which involves the coordination of all aspects of acquiring and distributing goods and services, can be enhanced through a focus on corporate digital responsibility (CDR), which ensures the ethical and responsible use of digital technologies and practices in the supply chain.


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