---
title: "Short note: SCM"
subject: "Information System"
chapter: 3
key: "semester_8/information_system:short-note-scm"
source: https://www.bctengineer.com/q/semester_8/information_system/short-note-scm
site: BCT Engineering
---

# Short note: SCM

Information System · Chapter 3: Enterprise Management Systems

- Asked in: 2073 Magh, 4 marks
- Video: [Supply Chain Management In 6 Minutes | What Is Supply Chain Management? | Simplilearn](https://www.youtube.com/watch?v=Lpp9bHtPAN0) — Simplilearn
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_8/information_system/short-note-scm
- Whole chapter: https://www.bctengineer.com/md/semester_8/information_system/chapter-3

## Question

Write a short note on 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.

## Answer

**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.

```text
 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).

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. What does SCM aim to deliver?
   A. The cheapest product regardless of quality
   B. Only the fastest delivery
   C. Only maximum stock
   D. The right product, at the right place, time and cost
   Answer: D. SCM plans and controls flows to deliver right product, place, time and cost. (Key point: SCM definition)

2. Which describes the pull model in SCM?
   A. Production based on actual orders
   B. Production based on forecasts
   C. Production based on supplier prices
   D. No production at all
   Answer: A. Push uses forecasts; pull uses actual orders. (Key point: Models)

3. What is the bullwhip effect that SCM helps reduce?
   A. Sudden loss of supplier data
   B. Distortion of demand as it moves up the chain
   C. Overheating of warehouses
   D. Loss of retail customers
   Answer: B. Demand distortion up the supply chain is the bullwhip effect. (Key point: Bullwhip effect)

4. Which is a benefit of SCM?
   A. Higher inventory and longer lead time
   B. More stock-outs
   C. Lower inventory and cost with shorter lead time and fewer stock-outs
   D. Worse supplier relations
   Answer: C. SCM reduces inventory, lead time and stock-outs. (Key point: Benefits)