The term “supply chain” refers to all entities involved in production such as resources, labour, information until product or service delivery to end users.
Supply Chain Management (SCM) is a system that manages the flow of supply chain activities. It starts with the best way to acquire raw materials, quality production of goods, inventory in and out strategies until delivery of final product or service in minimal time.
The goal of SCM is to optimize speed and efficiency to minimize cost without sacrificing quality. Successful businesses rely on trustable suppliers to ensure good quality, delivered on time otherwise the trader will lose the fast cycle or the quality advantage.
Large companies are aware that customers want speedy and reliable service, they invest in hiring specialists ensuring production efficiency and faster delivery; some tools they use include using available data in addition to logistics software to maximize employee’s output and coordinate their efforts in all steps of the production process to the delivery.
Supply chain management always seeks feasible ways to compete with other businesses in the field. As such, SCM departments in top companies having many distribution hubs can develop some cost advantages not necessarily available for less equipped businesses. Meanwhile, removing unnecessary steps can reduce salary costs. It can also increase negotiation power with suppliers and retailers that can benefit from a faster delivery cycle which in turn may allow for more favourable terms. These factors give huge cost advantages for any business or service dealing with production and distribution looking for customer’s satisfaction.