Talking about an eCommerce or online business, we commonly come across the term supply chain management. It is an integral part of online business and if you are an online entrepreneur you need to have some idea of the whole process.
What Is Supply Chain Management (SCM)?
In simple terms, supply chain management or SCM include the management related to the flow of goods and services at various stages. It starts from the manufacturer to the retailer, and ultimately to the customer. At each level, proper management is required in order to ensure the seamless flow of the products.
The main objectives of supply chain management involve the management of a wide range of components and processes, such as storage of raw materials, managing the inventory, warehousing, and movement of finished goods from the point of manufacture to the point of consumption. In economic terms, it can be referred to as the design, planning, management, and execution of supply chain activities from the point of production to the point of sale.
Supply Chain Management Functions
On a broader level, supply chain management consists of these four major functions and key element components, such as:
Integration
This forms the crux of the supply chain and is meant to coordinate communications to produce effective and timely results. It can include innovation of new software or advanced technological processes to improve communications.
Operations
This involves management of day to day operations in the eCommerce business. For example, it may deal with keeping an eye on the inventory or coming up with marketing approaches.
Purchasing
This deals with the purchasing decisions and management, such as purchasing raw materials, source materials and so on.
Distribution
This deals with the management of logistics across wholesalers, retailers, and customers. This may mean keeping an eye on the shipment, and other details.
In addition to these, there are also some subsidiary functions that an effective supply chain management process fulfills, such as:
- Aligning distribution flows
- Integrating the functions from manufacture to delivery
- Designing complex and advanced systems
- Managing and coordinating resources
If you get the basics right and manage your supply chain in the right way, you will surely enjoy good profits. Always remember that proper planning and implementation are the keys to successfully achieving the objectives of supply chain management.
How to Successfully Manage Supply Chain Operations
Seamless Communication
All the aspects of a supply chain must be connected with a strong communication network. A transparent communication will help each section progress and a constant flow of data will help in simplifying operations.
Integration Between Processes
There must be proper synchronization between every operation to ensure the smooth functioning of the entire supply chain. This can be attained by applying automation systems ad decreasing the load of manual tasks.
Shipping and Transportation
Shipping and transportation must be imbibed with a strong network of pin codes so that the entire supply chain is sorted and its role is defined. You can make use of transportation systems or shipping solutions.
