Executives often ponder over what all Supply Chain Management (SCM) cover does, and how would SCM benefits and SCM efficiency deliver the requisite ROI (return on investment).
Let’s look at two definitions of SCM … what is SCM and what is its objective (both picked from Wikipedia):
a) The INTEGRATION OF KEY BUSINESS PROCESSES across the supply chain for the PURPOSE OF CREATING VALUE FOR CUSTOMERS AND STAKEHOLDERS (Lambert, 2008) (Cooper et al., 1997)
b) “Supply chain strategies require a total systems view of the links in the chain that work together efficiently to create customer satisfaction at the endpoint of delivery to the consumer. As a consequence, COSTS MUST BE LOWERED THROUGHOUT THE CHAIN BY DRIVING OUT UNNECESSARY EXPENSES, MOVEMENTS, AND HANDLING. The main focus is turned to efficiency and added value, or the end-users perception of value. EFFICIENCY MUST BE INCREASED, AND BOTTLENECKS REMOVED.” (Hines, T. 2004:p76)
Objectives and requirements of various companies may vary, depending upon their bottlenecks / pain-points, focus points, process maturity, technology prowess, etc.
** THE MAIN PURPOSE IS TO IDENTIFY THE BOTTLENECKS, AND DRIVE EFFICIENCY, WHILE LOWERING OVERALL COSTS. **
This should be one of the focal points for SCM consultants, SCM Technology, and Supply Chain Management software.
SCM Coverage Span:
SCM consultancy, SCM software, and technology cover vast grounds (as per various needs), some of which are enlisted below:
- WMS: Warehouse Management System
- YMS: Yard Management System
- TMS / Logistics: Transportation Management System
- RMS: Retail Management System
- MES: Manufacturing Execution System / PPC: Production Planning and Control
- Inventory Tracking, Inventory Control, Inventory Optimization
- Supplier Relationship Management / Vendor Management System (VMS)
- Outsourcing and Partner Management
- Procurement Process
- Material Requirements Planning / MRP
- Asset Management, Tracking, and Asset Maintenance
- Demand Planning and Demand Management
- Order Fulfilment
- Distribution Management
- Shipment and Dispatch Planning
- Customer Relationship Management / CRM
- Issue Tracking / Complaint Management System
- Performance Management
Many of the above-mentioned aspects are interconnected, and help in driving the overall efficiency of SCM, and generate substantial ROI (Return on Investment) to the company.
We shall subsequently touch upon some details and nuances of various enlisted aspects.
PS: The SCM software should have in-built integration frameworks for integrating existing software(s) and hardware/firmware / PLC systems (as per need). It may be integrated with ERP deployed in the company (like SAP, Oracle / JD Edwards / PeopleSoft, Microsoft Dynamics, Sage, IFS, etc.), various accounting systems, or with systems like AGVs (Automated Guided Vehicles), Shuttles, conveyer belts, PLCs, Sensors, RFID (Radio-frequency Identification), GPS (Global Positioning System), IPS (Indoor Positioning Systems), etc.