Supply chain management is a cross-functional interenterprise system that uses information technology to help support and manage the links between some of company’s key business processes and those of its suppliers, customers and business partners. The goal of SCM is to create a fast, efficient and low cost network of business relationships, or supply chain, to get a company product from concept to market.

The interrelationship with suppliers, customers, distributors, and other business that are needed to design, build, and sell a product make up the network of business entities, relationships, and processes that is called a supply chain.

§ SCM is also called “extending” which means integrating the internal and external partners on the supply and process chain to get raw materials to the manufacturer and finished products to the consumer.

§ SCM is important in retailing because it helps manage the demand and supply functions.

§ SCM uses e-business concepts and web technologies to co-ordinate and optimize business processes in every corner of your extended enterprise.

SCM includes the following functions:

§ Supplier management

§ Inventory management

§ Distribution management

§ Channel management

§ Payment management

§ Financial management

§ Sales force productivity

Benefits of SCM:

· Lower operating costs through reduced inventory requirements.

· Improve customer satisfaction by maintaining adequate stock.

· Improve productivity through more efficient use of resources, better data integrity, fewer order entry errors and faster communications.

Supply chains are most relevant especially in the context of B2B (business-to-business) e-commerce where:

· The volumes of transactions are huge.

· Many organizations are involved in the roles of suppliers, vendors, customers and agents.

· Complex and high-volume, high-security technical information exchange is common.

Electronic data interchange (EDI) involves the electronic exchange of business transaction documents over the Internet and other networks between supply chain partners (Organizations and their customers and suppliers).

EDI over the Internet, using secure Virtual Private Networks, is a growing B2B e-commerce application.

The goal of SCM is to help a company achieve agility and responsiveness in meeting the demands of their customers and needs of their suppliers, by enabling it to design, build, and sell its products using a fast, efficient, and low cost network of business partners, processes, and relationships, or supply chain.

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