What is Supply Chain Management? 

supply chain management hoe werkt het

What is Supply Chain Management? 

The importance of Supply Chain Management


Having raw materials, semi-finished products, but also end products at your disposal at exactly the right time, what entrepreneur wouldn't want this? Realizing this ambition all depends on realizing a good form of Supply Chain Management (SCM). The term SCM is widely used in business to explain the (successful) management of the flow of goods and services. This involves the management of the entire chain, starting, for example, from the moment of purchasing certain raw materials or the first processing into a semi-finished product, to the temporary storage of the goods and transport to the customer or end user. An important feature of SCM is that all phases involved in the production of a particular product or service are visualized, with the aim of creating the most complete possible picture of the route that the product or service must take.

The influences on SCM


SCM is usually designed based on core principles regarding production design that come from various business theories that go back in time. For example, in the context of SCM, reference is often made to so-called Just In Time Management (JIT) and Total Quality Management (TQM), both theories that emerged in the 1970s and 1980s. Characteristic is that almost all ideas involved in SCM are aimed at adding value or combating waste (also think of Lean). What continues to emerge is the continuous need to be in control with regard to the supply of raw materials and determining the right time for the next steps. The end goal is to work increasingly more efficiently and effectively throughout the entire chain, which should prevent waste of time and money.

Core components of SCM


Although the precise design of SCM can of course differ per company and is also highly dependent on the products and services that are produced, there are usually a number of core components that emerge from almost every form of SCM. This concerns the following aspects:

1) Management
2) Analysis
3) Transportation
4) Logistics
5) Planning
6) Time to Market
7) Acquisition
8) Profit

The crucial role of transport


As can be seen in the list above, logistics and transport are part of almost every form of SCM. They are important core pillars when it comes to an efficient and effective process through which the products are created and, for example, delivered to customers. By supplying the right raw materials in a timely manner, properly coordinating the precise moment of delivery, but also transporting the goods to customers and the end user at the most optimal time in the chain can be of great importance to the total process. After all, a situation in which there are insufficient raw materials available for production costs time and therefore also money. Ultimately, the delay in production will also be noticeable by customers and end users. Damage to both image and finances can be the result. In fact, it can be said that a well-organized method of transport literally stands at the beginning and end of a successful flow.

The specific importance of road transport


As mentioned, transporting goods plays an important role within SCM; road transport can also be considered in this context. This type of course has a strong relationship with the SCM aspect of planning. Companies that frequently use road transport are wise to pay sufficient attention to the external factors that influence traffic-related matters when planning transport. In this way, one is not unnecessarily faced with unpleasant situations that can have a negative impact on the other aspects of SCM. Here too, the point is that it concerns the entire chain, in which road transport is an important part, but only one of the parts.