Types of Supply Chain Management
When it comes to optimizing business operations and logistic processes, few elements are more important than effective supply chain management. This process refers to the management of everything from production and product development to information systems and product delivery. Supply chain management (SCM) is crucial for maximizing efficiency, value, and customer satisfaction. As leading providers of freight and logistics services, the team at C&D Logistics understands the importance of supply chain management. That is why our team has provided some information on the primary types of supply chain management to help businesses understand the process and why it is so important.
The Primary Types of Supply Chain Management
Supply chain management (SCM) can be divided into two categories based on the functions they perform:
Supply Chain Planning Systems
Supply chain planning systems are focused on providing information to help businesses effectively plan their supply chain. This is crucial for ensuring that businesses do not miss out on potential sales or revenue due to a lack of inventory while avoiding lost profits from overproduction. Some of the important functions of supply chain planning systems include:
- Forecasting demand for specific products to allow businesses to prepare sourcing and manufacturing plans for them.
- Estimating how much product can/will be manufactured in a certain time period.
- Choosing a location for the finished products to be stored in.
- Identifying the best mode of transportation for the finished products.
- Setting the inventory levels for raw materials, intermediate products, and finished goods.
- Determining how much product (total quantity) must be manufactured to meet customer/market demands.
Supply Chain Execution Systems
Supply chain execution systems provide information to help businesses execute their supply chain procedures based on their plan. Proper execution is crucial for ensuring that projects stay on schedule and on budget. Some of the major supply chain execution functions are as follows:
- Managing the flow of products. Products typically flow in the following order: manufacturer – distributor – retailer – customer. This process ensures the most accurate delivery of products into the hands of an end user.
- Providing information about the status of orders to help vendors and retailers provide exact delivery dates to customers.
- Tracking shipments and accounting for products that have been returned. This system can also be used to track products that are to be repaired and serviced.
To learn more about supply chain management or to inquire about our logistics solutions, get in touch with the team at C&D Logistics. We can be reached at 604-881-4440 and will be happy to answer any questions you may have.