It’s known that supply chain management is an integral part of most businesses and is essential to company process success and customer satisfaction.
What is Supply chain management?
Supply chain management is the integrated process-oriented planning and control of the flow of information, goods, and money across the supply chain and entire value from the customer to the raw material supplier.
What is a Supply Chain?
An entire system of producing and delivering a service or product, from the beginning stage of sourcing the raw materials to the final delivery of the service or product to end-users and Consumers.
In another means, a supply chain is the network of all the organizations, individuals, resources, technology, and activities involved in the creation and sale of a product, from the delivery of the source materials from the supplier to the manufacturer, through to its eventual delivery to the end-user.
The main importance of Supply Chain Management
Supply chain lays out all aspects of the production process, including the activities involved at each stage, information that is being communicated, natural resources that are transformed into human resources, useful materials, and other components that go into service or the finished product.
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Importance of supply chain management
- Decreases Purchasing Cost
- A decrease in Production Cost
- Right quantity and quality
- On-time delivery: Avoiding any bottlenecks and ensure customers get their products in the promised time frame
- After-sales services: the right supply chain ensures that customers get the service they want
Supply chain management components
- Procurement
- Manufacturing
- Distribution
- Logistics
- Sales
Supply chain management components definition
Supply chain The generic supply chain begins with the extraction and sourcing of raw materials. And raw materials are then taken by logistics to a supplier, which acts as the wholesaler.
The materials are taken to a manufacturer through logistics, or probably various manufacturers who process and refine them into a final product.
It goes to a distributor afterward, that wholesales the final product, which is delivered to a retailer next. And the retailer sells the product in a store to consumers.
Once consumers buy it, the cycle completes, but then when it goes back and drives the production of more raw materials it’s their demand to continue the cycle.
ERP Software solutions allow for the integration and automation of business processes, therefore reducing the amount of manual labor that the company team has to perform.
For example, an ERP supply chain solution might receive a client order and then send that information automatically to the distribution center that is most efficiently positioned to finish and complete the order in a timely manner.
If you’ve ever noticed that the return address on products that you receive isn’t always the same from the same vendor, Depending you will see the result of the ERP technology firsthand to Eliminate this Errors.
ERP system looks at inventory levels, Order Tracking, shipment times and other factors to decide which distribution center would be most productive and cost-effective in completing an order and Minimize the Delay. it contains dashboards where users can look at real-time data collected from all across the business to measure productivity and profitability.
ERP system uses a centralized database for various business processes to reduce manual labor and to simplify existing business workflows In general, and that’s the meaning of Automation of workflow for reduced overhead and operational costs
ERP Improves Productivity
Without ERP software, data is siloed by the department and can be difficult to access across a company.
By using an ERP, data from multiple departments can be easily shared and visualized across an organization. This wealth of information and simplification can assist in the development of business goals and reduce the amount of time that your employees spend on tasks that could be automated.
In short, the ERP system in Supply Chain helps commercial areas like finance, logistics, sales, production, distribution, and others to be interrelated to each other.