You must ensure the efficient movement of goods from where they are produced to where they are consumed or used for something else in your supply chain. You can achieve this by managing the supply chain in your business.
Supply chain management (SCM) is a strategy that uses supply chain networks to manage the flow of goods and services through an organization. The system must be planned and coordinated, as well as managed and controlled, in order to achieve business goals. It is one of the most important organizational functions and can be divided into five basic steps.
Step 1: Planning
Planning is the first step of the supply chain management process. It should be done before any other action, even sourcing or contracting. Planning is an ongoing process throughout your company and helps you understand how everything works together—and if it doesn’t, then it won’t work out well for you!
Planning should be done in several stages:
- Define goals and objectives (e.g., what products/services are needed? Where do they come from?)
- Identify key suppliers to develop relationships with them (e.g., suppliers who supply raw materials/parts). This may include visiting their facilities or talking over the phone, so they can get a feel for their needs before deciding whether or not they want to work on a project(s).
Step 2: Procurement covers ordering and purchasing
The second step is procurement which covers ordering and purchasing. This involves acquiring products from suppliers, ensuring they meet all requirements, negotiating prices and terms of payment, and matching orders with available stock to avoid delays in delivery.
In addition to these steps being essential for any business looking to operate effectively within its supply chain management process, they also provide an opportunity for companies who want their supplies handled efficiently to ensure everything goes smoothly from start-up through until closure – no matter how complex or simple your operation may be!
Step 3: Storing and warehousing
In order to store goods, you must have a warehouse where you can store them. A warehouse is an area that stores items for sale or service (for example, clothing items) on behalf of another person or organization (the business owner). Large companies or organizations often use warehouses to store large amounts of inventory so that they can be accessed quickly when needed by customers in different locations around the world.
Step 4: Logistics
Logistics is the process of moving goods from one place to another. It includes planning for moving or storing products and then actually doing it. In addition to moving goods, logistics also includes storing them until they’re needed or delivering them when necessary.
Step 5: Monitoring and controlling
The last step in SCM is monitoring and controlling. This involves monitoring the flow of goods from origin to destination, ensuring that the right goods are produced and delivered at the correct time. Monitoring also involves making sure that no problems arise during transportation or storage.
Conclusion
Supply chain management is a process that involves the planning of supply, procurement, storage, distribution and movement of goods. It also includes maintaining inventory levels for each phase of production and distribution.
While the five steps of SCM are often discussed as one, it’s important to remember that these steps are separate processes. All steps in this process must be carefully carried out to ensure high-quality products reach their intended destination safely and efficiently.