- 2073 Magh · 4 marks
Short note: SCM
Short answer
SCM plans and controls the flow of materials, information and money from supplier to customer for right product, place, time and cost. It covers planning, sourcing, production, logistics and returns, using push or pull models, and provides lower inventory, shorter lead times and better service.
Write a short note on SCM.
Supply Chain Management (SCM) is the planning, coordination and control of the flow of materials, information and money from suppliers through the manufacturer and distributors to the final customer, to deliver the right product, at the right place, time and cost.
Supplier -> Factory -> Warehouse -> Retailer -> Customer
<------ information and money flow ------->
Main activities: planning and forecasting, sourcing/procurement, manufacturing, inventory and warehousing, transportation/logistics, order fulfilment and returns.
Models:
- Push - production based on forecasts.
- Pull - production based on actual orders.
SCM software supports demand planning, supplier collaboration, inventory optimisation, shipment tracking and uses EDI, RFID and the Internet.
Benefits: lower inventory and cost, shorter lead time, fewer stock-outs, better supplier relations and customer service. It also reduces the bullwhip effect (demand distortion up the chain).
✓ Answer checked by Claude Opus 5.5 (high effort)