Logistics supply chain management is one of the most contemporary and challenging concepts in today's business world. Due to the increasing global demand for business; transportation, procurement, manufacturing, distribution activities increased rapidly. Now a day, the major companies are focusing on supply chain management to reduce costs and continually striving to develop new innovative strategies to meet consumer demands to achieve a competitive advantage.
2 Definition of Supply Chain Management:
In short, supply chain management means, the right products in the right place at the right time in the right size and in the right amount. For example, in the supermarket, if the consumer found in a product shelf, there is a tag for the product but no product in shelves; what you think?
Yes, it is because of poor management of SCM. More precisely, SCM is the management of inbound and outbound logistics process to integrate from procurement, suppliers, manufacturers, warehouse, distributors, transportation, and store in order to meet consumer demands.
3 Why Supply Chain Management is Important?
As global competitions are increasing customer have different choices & needs. For example, if there is a demand for umbrellas in the rainy season and if you ask the supplier to provide 20,000 umbrellas in the summer and is expected to receive at the beginning of the rainy season; what will they think might happen?
According to this scenario, let's say, for example, supplier response lately after two weeks, slowly began levying and then start the production and supply goods at the end of the rainy season. As a result, in this case, the buyer will face huge losses.
Let's just think how can we change our scenario with an effective strategy: consider the order of umbrella was given at the end of spring to deliver at the end of summer. Supplier response precisely, starting from procurement to distribution utmost efficiently and transported through freight within one week before ending summer.
Delivery is on time and arrives within 30 days in summers. The buyer is happy to receive items on time and that allows the buyer to distribute products through the distribution channel and, with the right forecasted of demand, buyer captures the market at the right time and makes money.