What is supply chain management (SCM) and why is it important?

What is supply chain management (SCM) and why is it important?
ERP supply chain management

Supply chain management (SCM) is the broad range of activities required to plan, control and execute a product’s flow from materials to production to distribution in the most economical way possible.

SCM encompasses the integrated planning and execution of processes required to optimize the flow of materials, information and capital in functions that broadly include demand planning, sourcing, production, inventory management and logistics — or storage and transportation. Companies use both business strategy and specialized software in these endeavors to create a competitive advantage.

What role does ERP play in a supply chain management strategy?

The integration of Supply chain management and ERP allows manufacturing and distribution businesses the ability to gain greater visibility into all operations while increasing speed, efficiency and overall customer satisfaction.

A growing number of businesses recognize the many potential benefits of Enterprise Resource Planning (ERP) when it comes to managing business information, integrating various systems and working processes, and ensuring optimal operational efficiency.

When it comes to Supply Chain Management (SCM), businesses need to interact with numerous suppliers and partners in order to obtain the raw materials and resources needed to bring finished goods to market. ERP plays a vital role in combating inefficiency; reducing waste and ensuring that workers are better able direct their efforts. The integration of both systems may pose some unique challenges. It is in your company’s best interest to ensure that you and your staff fully understand the role of ERP within the SCM process.

Benefits of Combining Supply Chain Management and ERP Systems

The feature-rich working environment of ERP combined with the more streamlined and efficient workflow of an effective SCM can provide a range of important advantages, including:

  • Improved efficiency across multiple departments and organizations working within the supply chain
  • Improved customer service for increased customer retention and greater chance of repeat business opportunities
  • Automation of workflow for reduced overhead and operational costs
  • IT issues and problems that are less likely to create bottlenecks to impede efficiency
  • More flexible supply chain solutions that may be readily adapted to meet the needs of changing circumstances or future business growth and expansion

ERP systems are a crucial asset in the creation and implementation of a more efficient supply chain process.

An inefficiently managed or outdated supply chain process is a liability that no business can afford to overlook. The integration of SCM an ERP means that you can deliver your products and services to end-line consumers with greater speed, efficiency and overall quality.

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