Supply Chain Management (SCM) involves managing of goods and services. It includes different stages like storage of goods, logistics and supply of goods to the customer after manufacturing.
It can also be referred as the combination of materials management and product distribution of an enterprise.
Advantages of SCM
Supply chain management increases the flexibility and efficiency for the logistics of a product. The following are the advantages of supply chain management −
** It increases the efficiency to deliver on time by approximately 20 %.
** It reduces inventory requirement by approximately 50 %.
** It increases the sales of product from 3 to 6 %.
** It provides integrated controlling for the function of logistics at the front and back end of business.
Disadvantages of SCM
The following are the disadvantages of supply chain management −
** It considers material management important and customer requirement for logistics as superfluous for the supply cycle.
** Consequently, customer requirement for logistics is not executed with high importance.
Thus, supply chain management has both advantages and disadvantages and both have to be considered for implementation in an organization.
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