What is supply chain management and why it is important?

A supply chain starts with the procurement of raw materials from a supplier and concludes with the delivery of the finished product or service to the end consumer. It is a network of individuals, organizations, resources and processes involved in the shaping/creation of that final product/service. SCM is the management of the flow of goods and services; and involves processes like Logistics, Lead time management, procurement, Distribution, Profit and resource optimization, planning and analysis in an effort towards the development and implementation of efficient and economic solutions. It involves the active streamlining of a business's supply-side activities to maximize customer value and gain a competitive advantage in the marketplace of its orientation.

Supply Chain Management is a fairly recent concept and consists of various activities as listed below:-

• Product Development,
• Procurement & Manufacturing,
• Logistics,
• Consumer Service,
• Performance Management,
• Integration & Information sharing.

Supply Chain has successfully transformed the face of the industry and is now considered as the backbone of all industries, with amplitude of social and economic benefits to offer.

Economic Importance

1. Reducing costs:

A well established Logistic Network Chain helps in reducing operating costs by ensuring timely delivery of products thereby reducing the requirement for holding inventories whether in stores or in warehouses. The costs of delivering materials to assembly plants, warehouses and end consumers are brought down as Logistic network chain aims at optimization of lead time delivery, order location, relocation, logistics and reverse logistics. It not only ensures quality of material in transit but also, reduces the time and wastage of efforts in process.

2. Strengthening Financials:

Logistic network professionals continually strive for the best network solutions, these, once attained not only help in ensuring a faster cycle of payments by improved and speedy delivery systems, but also, ensure reduction in requirement of expensive infrastructure like buildings, warehouses and storages. An efficient and effective supply chain ensures profit, increases cash flow and at the same time reduces fixed expenditures, thereby making the business more financially viable.

Social Importance

• 1. From delivering the most basic products like food and water, to the most fancy, it is supply chain that keeps the economy running by ensuring production and matching demand and supply. But, most importantly, it keeps life functional. SCM is the biggest support in face of modern surgery, and in case of a medical emergency, its performance can be the difference between life and death.
• 2. It ensures connectivity among cities, states, countries and continents. Developed supply chain infrastructure ensures seamless intermodal transit and ensures affordability to consumer. This in turn, raises the standard of living and quality of life of individuals.
• With an eye at all utilities and modalities of multi-functional Supply Chain, Lloyd Business School, located in the heart of Greater Noida offers a PGDM in Supply chain Management programme, as diverse as the subject itself. The modules are divided between classroom and On-the-Job Training sessions. Centered at extending a 360 degree exposure to its student managers.