Organizational Design: Supply Chain Management

Definition of Supply chain management (SCM)

Supply chain management is some sort of flow of product or service or raw products (can be convertible into the consumer good) from one source to another. Here source can be a manufacture, service provider or maybe the final consumer. Some include information supply is in the criteria of SCM. SMC is a process of supply the materials, information and “finances as they move in a process from supplier to manufacturer, to wholesaler to consumer” (Renganathan, n.d.). It is a work of coordinating. A good chain of supply always makes the company profitable. As it does not save any excess material or good and always save as much as the company needed. And Beamon (1998) asserts that for this reason the company should not invest excess money for the reason. If there is no proper chain management the company should not understand where to invest and where not.

To show the chain supply management there is example shown on the next page. An example is the supply management of a warehouse (TU Delft TBM, n.d.a). The example showing that the raw material is supplied by the sources to the manufacturing plant, and the manufacturing plant pushes it to the warehouse, and the product being produced is distributed to the retailers of wholesalers. If the product belongs to the wholesalers then they supply it to the retailers and finally it is sold to the consumers. It is the flow of products from the source to the consumers. But there is another flow that happened to the chain. And the flow is financial flow. That works just opposite of it. Consumers purchase by cash it has been gathered by the retailers. And the chain began from last stapes and complete to the first point. These are the form of chain works in it.

Works of supply chain management

Works of supply chain management are also reflected in the definition of the supply chain management. Though works of supply chain management is briefly indicated by Joshi (2000) in following ways:

• Purchasing: The first work is to purchase product or raw material from the source of from the producer (like- farmer, collector of raw material )
• Supply to the next source: After further processing or if the purchaser is only seller then the goods or raw material should be supply to the next source.
• And after the proper processing when product is ready to sell then it should be sold to the final consumer and finance is collected.