A.7. Supply Chain Management
Supply chain management (SCM) is the management of the flow of goods. It includes the movement and storage of raw materials, inventory, and finished goods from the point of origin to the point of consumption.
Let’s analyze the case of Supply Chain Management for the Food Processing Industry. Raw materials like grains, raw meat, fish, etc. are collected from different sources. These sources may do preliminary processing of these to make components of a food product before passing over them to the main manufacturer through many middlemen. The manufacturer does the final processing of these components to make the food product. This completes only the first stage of supply management.
Now the finished product has to be delivered to the consumer. Here also there will be several middlemen and stages. The manufacturer normally hands over the food product to a wholesale dealer. The wholesaler passes the product to a retailer from where the consumer buys the processed food item for his personal use.
Thus, Supply Chain Management is the management of the upstream and downstream value-added flow of materials from suppliers→ company→ retailer→ final consumers.
If there are good Supply Chain Management practices in a country, then it will boost the economy as a whole. Good supply chain links help farmers, manufacturers, wholesalers, retailers and consumers. Everyone in the supply chain link will get inputs at a faster rate, at the right time, and at a cheaper cost.