The success of any company is based on the accessibility to fill the demand for products or services, the speed with which a product can reach the customers or market, additionally maintaining a good relationship with its suppliers.
Supply Chain Management is a way to set the parameters with which a company or business can operate while attending the demand for products or services, with a line of providers of materials, equipment and other services required for the end product to reach the market and, of course, the consumers. (see Figure 1)
Having an efficient supply chain management, helps companies reduce costs, either for transportation or storage, shorting distances, by having availability to or from suppliers to or from the …show more content…
(“Fundamentals of" n.d.).
In modern times Supply chain management facilitates the operation and management of any company based on the needs of production, transportation and access to consumers, by establishing steps so that the final product can reach their consumers, it starts from the acquisition or purchase of raw materials or the equipment to handle the production, staff training, establishing relationships with vendors, suppliers and a better access to markets to sale the product or service, which is the final step of this production line, it also helps to figure up better routes to deliver the goods.
The Supply Chain Operations Reference model (SCOR) provides 5 functions for the management of a supply chain: (“Fundamentals of" n.d.).
1.-Plan: planning creates a balance between existing resources and demand, communicates administration plans along the supply chain.
2. Source: procures compliance with the demand for products or services, management identifies suppliers, delivery dates, payment authorization and inventory …show more content…
Return: this function processes the return of customers, repair or maintenance of the product or service also handles excess inventory, managing activities include authorization of comebacks, provision of services or products, credit or replacement.
Having supply chain management, it is important for the operation of any company that intents to bring to market some innovative product or service, in this way responsibilities are distributed and ensures that the final product may be placed on the market, depending on the demand of the same.
Supply Chain Management, also helps to determine the costs of each of the parts of the production process of a product or service and this helps companies determine how much to spend and the investment that has to be done for the production of a product or service and identify any expenses which might be not needed for production.
There are different ways to establish a supply chain network, based on the needs or constraints that the company may have. 5 Steps are listed to considerer for this purpose. (“5 Steps”, 2003).
-Define the objectives: it is relatively difficult to identify all the needs of logistics and distribution immediately, the critical point is to identify the main objectives of the