Supply Chain Management (SCM)
What is SCM?
The world of supply chain has changed drastically over the last few years. On one hand, there are shorter product lifecycles and increased labor rates, on the other hand, there is an increased number of global customers and stricter compliance and regulations. Due to this, the demand constantly varies and becomes increasingly difficult to predict. This change has led to the rapid evolution of Supply Chain Management (SCM) systems that can help business streamline their supply chain as required by competitive global markets.
From product design to development, raw material procurement, production and manufacturing to inventory and warehouse management and eventually extending to logistics, transportation and last mile delivery, today’s SCM system manages it all.
What does SCM do?
In today’s competitive and demand-driven market, technology has empowered supply chain management. No longer does the manufacturer need confirmation of sales or orders to initiate production. A combination of analytics and predictive algorithms help in predicting both raw material requirements as well as production planning.
Modern SCM systems provide business managers with increased visibility and transparency across the entire value chain. Each component, unit and delivery can be tracked effectively from production to delivery. Advanced analytics and machine learning algorithms make it possible to forecast and manage demand intelligently. Manufacturers can now optimize their raw material procurement and inventory according to demand projections and variations.
Operating costs are always under pressure in a traditional supply chain environment. In such cases, SCM systems can help manufacturers break the paradigm and build efficiency in the system.
Function areas of SCM
Logistics Management: One of the key aspects of an SCM system is handling logistics – from warehousing to transportation to delivery, SCM can track shipments easily, thus minimizing loss from damaged or delayed shipments as well as improved efficiency.
Procurement: A procurement management module ensures transparency in the system as well as ensures timely delivery of raw materials.
Manufacturing Management: This essential component of SCM enables manufacturers to plan their plant operations, anticipate demand, risks and delivery effectively.
Supply Chain Planning: Efficient supply chain planning solutions lets manufacturers efficiently forecast demands and optimize their supply chain, thus reducing costs.
Quality Management: One of the key modules that ensure checks and balances throughout the value chain, quality control is key to customer success.
Maintenance Management: Tracking maintenance across the plant and delivery operations is made easier through prescheduled checks, reminders and audits.
SCM Trends and Industry Needs
As businesses expand and customers become more demanding, it is pertinent that supply chain management systems are flexible, agile and scalable. It is also important that the data captured through the system is harnessed into intelligent and meaningful insights.
Mobility and Cloud-based Products: End-to-end connectivity and ease of access is the dominant trend in SCM systems. With customers located across the world, connecting each and every aspect across the value chain is pertinent to ensure efficient delivery.
Using technology to improve security: From defining access levels for users to scheduling audits and introducing the use of microchips to locate shipments, technology is helping companies identify and prevent theft and loss.
Internet of Things (IoT): Delays in transportation, loss of cargo and shipments, thefts and outages are a common problem in logistics-driven industries. An IoT connected platform using its sense-and-respond feedback mechanism can transform both logistics as well as supply chain management in such scenarios.
Artificial Intelligence (AI): Elements of AI use existing patterns to predict future outcomes. Elimination of uncertainty in future prediction can improve decision making with respect to both demand and operations.
Top SCM software vendors
SAP: SAP provides one of the most popular and widely used SCM systems. Armed with built-in business planning and intelligence components, SAP SCM systems help manufacturers integrate supply chain with sales and operations and make informed decisions.
Oracle: Ideal for large businesses, Oracle provides an efficient SCM as a Software as a service (SaaS) product as well as necessary hardware, infrastructure and data services. Integration with an end-to-end ERP solution is available as well.
JDA: An effective SCM system aimed exclusively at manufacturing, retail, distribution and logistics industries, JDA is ideal for companies of all scales and sizes, sespeciallywhere there are components of e-logistics and distribution.