Supply chain management controls the process of manufacturing and delivering a final product.
There are five recognized key steps or links in the chain that should be managed. It starts with the planning. Before anything else, a supply chain manager needs to confirm what needs sourcing, how it will be delivered, and how the process will be measured to ensure efficiency, and quality and highlight ways to reduce costs and risks.
The next stage is sourcing. Depending on your product, this could be raw materials or even services. This stage includes ordering, inventory management, and the handling of payments.
Once the materials have been sourced, the next stage is manufacturing. This includes the acceptance of raw materials at the manufacturing base, producing the product, and quality assurance.
After the product is made, the next stage is delivery. Logistical management is a huge part of supply chain management and includes handling orders, arranging for delivery, and accepting payments.
Even after the product has been delivered, the supply chain doesn’t end. While companies hope to avoid returns, the returns process is an unavoidable part of the supply chain. A supply chain manager needs to establish processes for accepting returns and determine how products will be handled if they are defective or to be resold.
Good supply chain management is vital for businesses. Firstly it can help you trim excess costs and reduce production time. But it’s also important to track product quality. Product recalls and customer complaints can all result from poor supply chain management.