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Functions of Supply Chain Management
Supply chain management is a cross-functional approach that includes managing the movement of raw materials, the process of turning raw materials into finished goods, the movement of finished goods out to the end consumer. In other words, SCM means streamlining and strengthening the linkages between the various functions, and finding ways for these functions to integrate cohesively.
The primary function of Supply Chain is to meet or surpass the required or demanded customer service level in the target markets and to optimize total supply chain investment and cost. An effective supply chain assists in the flow of information up and down the supply chain. This sharing of information enables all stakeholders to proactively plan on how to meet their current as well as future needs.
Supply chain management is instrumental in defining business boundaries and relationships. The most important of these business boundaries relates to the decisions of which business processes to be outsourced and which ones to keep in-house. The relationship aspect refers to the interaction between the various supplier and buyers and their influence in each other’s business decision and operational activities.
Supply chain management serve as a backbone for key internal as external operations of a company. For instance, SCM supports manufacturing in many ways like, reducing manufacturing lead times, supporting lean manufacturing processes, etc. SCM also streamlines other functions of business such as procurement, order management, logistic management, warehouse management, inventory management, distribution channels, customer relationship management, etc.
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