What is Supply Chain Management and What is the Role of Information in it

Supply Chain Management:

Supply Chain Management or SCM is the coordination amongst inventory, production, and transportation for the best results from both manufacturer and customer ends. It includes properties of traditional logistics as well as elements of marketing, new product development, supply chain finance and customer service.

Supply chain management is what every businessman should know. There is some necessary information that plays a crucial role in defining what is supply chain management.

Importance of supply chain logistics – Logistics management is essential to handle daily inflow and outflow of a company’s raw materials and finished goods.

It can be divided into inbound logistics, which indicates the goods and raw materials procured from suppliers to a company; and outbound logistics, which is the shipping of finished products from the company to the customer.

Importance of supply chain finance – Supply chain finance channels a specific part of a company’s revenue towards better management of the system. Supply chain financing helps streamline the entire system, procure better equipment to improve logistics and integrate the latest technology to make inventory management more efficient.

Companies often reinvest a part of their revenue to finance supply chains. However, a businessman can also opt for an advance from financial organisations like Bajaj Finserv to receive additional monetary support.

Role of Information in Supply Chain Management:

Information plays a crucial role in the proper management of a business’ supply chain. It attends numbers of factors in a business process and manage all the things from starting to end. Let’s take a look how it can helps:

• It helps the managers get a detailed understanding of various parameters and workings of the process.
• It keeps supply chain finance streamlined and brings the current information and whereabouts of suppliers, partners, distributors, and end-users.
• A businessman who is aware of what is supply chain can make a better business decision with the correct information.
• As businessmen get a clear idea about their organisation’s inventory, procurement, production, and resource management, they can better judge the production, logistical capacity as well as direct operations accordingly.
• The role of Supply chain management is that the information provided by it always helps them to determine the effectiveness of newer operations.
  For example: A company introducing a new product can check out its supply chain and understand whether the demand for that particular product has increased amongst their customers or not. It allows managers to make decisions according to a particular product’s performance. However, the information has to be accurate, easily accessible in time and should be shared.
• Information Technology (IT) has brought a significant impact on various companies’ performances.
• The availability of information and the necessary computing power to analyse it in real time have become key decision-making factors for an enterprise’s success.