Emergency Logistics Glossary

What does supply chain management mean?

Supply Chain Management: Definition and Examples

Supply chain management (SCM) is an essential part of process optimization in a company. SCM deals with the planning and control of the flow of goods, information and money. The focus is on the entire value and supply chain, from the supplier of raw materials to the customer. The aim of SCM is to optimize the delivery of goods, the flow of money and the flow of information.

What are the benefits of supply chain management?

Supply chain management opens up a wide range of opportunities to leverage potential along the entire value and supply chain. For example, SCM can be used to achieve the following benefits:

  • Reduction of inventories along the value chain
  • Reduction of storage costs
  • Securing just-in-time supply
  • Shortening cash-to-cash cycles

In addition, supply chain management offers further advantages. For example, professional supply chain management can help shorten lead times and increase delivery reliability. Among other things, SCM thus makes a valuable contribution to a company’s customer relationship management.

Which areas does supply chain management cover?

SCM aims to optimize processes in the following areas:

  • production flow
  • information flow
  • financial flow

Complementing logistics management, SCM focuses on all of a company’s business processes. The supply chain management perspective includes purchasing, production and distribution as well as marketing, controlling and the warehouse.