Supply Chain Management Essay Example | Topics and Well Written Essays - 1250 words

Supply Chain Management - Essay Example It is always necessary that the inventory does not get too out of hands and is not short of the predicted demand at the same time. Definition Supply Chain Management refers to the entire process and stages that go in the supply of goods and services. To coordinate the production and market supply. It refers to the management and integration of all operations within and outside of the organization to maintain the entire supply chain, like production of goods, entire process of inventory stocking, procurement of raw materials from various suppliers outside the organization, transportation and distribution of raw and readymade goods in a cost effective manner, so as to ensure the overall cost of production can be kept low, in turn resulting higher profit margins. In addition to the scope mentioned as above, one of the most important functions of the supply chain management is to draw business boundaries and define the scope of the business, which will allow an organization to analyze an d understand the feasibility of carrying out a certain production function in-house or outsourcing the stage for better results. According to Mentzer, et al: "Supply chain Management (SCM) is defined as the systematic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain, for the purpose of improving the long-term performance of the individual companies and the supply chain as a whole" (Ballou 5). Functions The main roles of supply chain management can be understood by dividing them into the following heads: Identifying the Scope and Feasibility Demand and Supply/Adequate Inventory Logistics Procuring and purchasing Production Sales The primary role of supply chain management is to observe and analyze the existing operation cycle of an organization and then define the scope of the various stages and aspects of in-house production. This is done to understa nd the feasibility of outsourcing some stages of operation to a third party in order to keep the cost low, get better quality products and get the finished product in a limited time, so as to ensure smooth running of the organization. Demand and Supply as discussed are at the core of any business defining its market existence and sustenance. The key is to meet the current market demand and have adequate stocks to meet any sudden changes in the demand curve, yet ensuring that the stock inventory goes too high that it starts affecting the overall cost of production. Obtaining, storing, transporting and then distributing are the core functions in the logistics function of the supply chain management. Fetching and transporting the raw material to the production site and then storing the finished product in the warehouses to finally getting the products distributed to be consumed directly by the consumer are some of the functions of the logistics that in turn have a major affect on all t he other stages in the entire supply chain management cycle. Procuring and pur