Elements of Supply Chain Management
There are primarily 3 elements that constitute supply chain management, and any individual or organization looking to follow the best practices of supply chain management should keep these elements in mind. Focusing on each of these elements, in order to combine them and deliver the best possible customer service, is the ultimate aim of this process.
Product
This channel of management implies that the product must be in demand. To create a product and not generate demand for it is a useless venture, as it is the demand for a product that ultimately, starts the entire manufacturing process. Ensuring that the product reaches the customer in a timely, accessible and quick manner is one of the key elements of supply chain management. Any delays, in this process, will lead to a loss of business.
Information
For a customer to demand a product, information about the product must reach to him first. Demand can only be generated in a customer if he is aware of the existence of the product in the first place. The information flow, that goes on in supply chain management, also involves the different channel partners communicating various needs and data amongst themselves, so as to enhance the ultimate goal of customer satisfaction.
Finance
The finances involved in the supply chain also play a major role. As the product passes from one subsequent stage to another, the mode and terms of payment must be clear. There are a lot of credit terms and conditions that can be applied in order to get the best possible deals from suppliers, and these can only be increased further by building up strong relationships with the suppliers. “What is supply chain management system?” is a question that finds its answer in a blend of these three elemental functions of supply chain management.
