• Share

How to Manage Supply Chain: 5 Parts of SCM

If you’re in charge of a company’s supply chain, you know how crucial it is to keep things running smoothly. After all, an efficient supply chain can mean the difference between success and failure for businesses. It is important you know how to manage supply chain effectively

This article teaches you how to manage supply chain by looking at the five essential parts of SCM: planning, sourcing, making, delivering, and returning. These key components (and their respective best practices) will help you with the knowledge you need to manage a top-notch supply chain.

What Is Supply Chain Management (SCM)?

It encompasses the entire supply chain from the supplier to the customer.

Supply chain management involves actively optimizing a company’s supply chain to gain a competitive edge.

Why Do We Need to Manage a Supply Chain?

Supply chains are complex, and there are many different elements to them. The part of the organisation that you work in will have an impact on your supply chains, and this in turn will impact the value that your company can utilise.

If you manage HR procurement, you play a vital role in the supply chain by recruiting the right staff to work at various points within the chain. You may recruit specialists or invest in training and development for existing staff members, adding value to your organization’s product or service offering.

Why do we need to manage a supply chain? We need to manage a supply chain in order to add value, through upskilling or investing in the right talent who can help deliver our organisation’s product or service offering.

As a category manager for raw materials, you play an important role in ensuring the quality of the products your organization provides. By building trust with suppliers and auditing their practices, you can help improve the overall quality of the products and offer more sustainable options. In doing so, you add value to the supply chain and help align it with your organization’s corporate strategy.

There are many different aspects of the supply chain that you can manage, but the goal is always to add value. This value should be in line with your company’s strategy and consumer demands. By ensuring that your supply chain is efficient and effective, you can help your company succeed while also meeting consumer needs.

What Are the Key Objectives of SCM?

The key objectives of SCM are to reduce the overall cost of supply and to improve the responsiveness of an enterprise to the market place.

The success of the organization depends on effective performance measures that are relevant to each key link in the chain and the organization’s overall objective.

If we don’t have a plan on what we’re trying to improve and how we’re going to measure it, it’ll be difficult to focus our efforts on what will bring the most improvements and cost benefits.

The key objectives of SCM are to reduce waste, maximise customer service, improve communication and reduce cycle time.

How Supply Chain Management (SCM) Works

SCM is a way for companies to improve their efficiency and lower their costs by collaborating with their suppliers.

The supply chain is the entire network of people, companies, and resources that are involved in producing and distributing a product.

SCM is all about controlling every stage of the production process. By managing everything from the internal inventory of a company to vendor relationships, SCM helps companies cut costs and streamline their business processes.

Manufacturing companies are keeping a closer eye on their inventory by controlling production, sales, and distribution more tightly.

SCM is a system that manages the flow of goods and resources between organizations that are involved in the production and distribution of a product.

Many companies have finally realized that supply chains are important to creating their customer value.

How To Manage Supply Chain

In supply chain management, the (supply chain) manager is responsible for coordinating the (logistics) of all parts of the (chain). The (five) parts of the (chain) are: the plan or strategy, sourcing, manufacturing, delivery and logistics, and the return system.

The supply chain manager is responsible for managing all logistical aspects of the company, including purchasing, shipping, and inventory. The job requires strong communication skills, as it involves working closely with company vendors and suppliers.

A supply chain manager is responsible for overseeing and managing the organization’s supply chain and logistics operations in order to optimize efficiency and minimize costs.

Productivity and efficiency improvements can have a direct impact on a company’s bottom line. Good SCM can help keep companies out of the headlines and away from expensive recalls and lawsuits.

Example of SCM

Walgreens Boots Alliance Inc. understands the importance of SCM to its business and has decided to invest in technology to streamline the entire process, making it more efficient and effective.

For the past several years, the company has invested heavily in its supply chain and inventory control. Using big data analytics, they were able to improve their forecast capabilities, as well as manage their sales, and inventories.

Walgreens made a strategic move in 2019 by adding its first-ever Chief Supply Chain Officer, Colin Nelson. His primary focus is to enhance customer satisfaction as the company continues to grow its digital presence. This was a key addition that Walgreens made in order to stay ahead of the competition and maintain a high level of customer service.

In 2021, the company announced that it would offer free, same day delivery of 24,000 items in its store. This initiative is expected to increase customer satisfaction as Amazon expands its online offerings.

How Are Ethics and Supply Chain Management Related?

Supply chain management involves acting in a socially responsible and ethical manner.

People who buy things and people who invest money care about how companies make their products, how they treat their employees, and how they protect the environment.

Companies respond to waste by implementing practices to help reduce it, such as improving work conditions, and lessening the environmental impact.

SCM vs. Supply Chains

A supply network is a group of companies and individuals involved in producing and supplying a product. This usually includes resources, activities and technology.

A supply-chain is a series of steps, beginning with delivery of materials from a supplier to a manufacturing firm. The finished good is then delivered to the final customer.

SCM oversees each touchpoint of a company’s product or service, from initial creation to the final sale.

SCM is vital to a company’s success as it oversees each touchpoint of a product or service. By ensuring efficiencies along the supply chain, SCM can increase revenues and decrease costs, positively impacting a company’s bottom line.


Now you know how to manage supply chain. With these tips, you can ensure that your company’s supply chain is efficient and effective. So don’t wait – start improving your SCM today!