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Supply chain management (SCM) describes the strategic coordination between tactical decisions and the traditional business functions of a company with regard to the long-term performance of the supply chain. SCM focuses on the establishment and management of all material and information flows. Since supply chain management covers the entire value-added process from the production of raw materials to the customer, it goes beyond the classic fields of application of logistics. The aim of supply chain management is to improve the supply chain and the entire entrepreneurial thinking and acting to ensure the smooth supply of end consumers - regardless of whether they are private customers or companies.
Since all necessary data is available in digital form across all departments, all planning and execution-relevant processes can be brought in line across the various departments. Supply chain management ensures that all task processes are optimally coordinated, from the procurement of goods, through individual production steps, to the sale and distribution of goods. This enables companies that have an optimised supply chain management to react immediately to internal discrepancies or deviations as well as external influencing factors.
Nowadays, a well-thought-out supply chain management is often one of the basic requirements for the marketability of products. Companies therefore depend on integrated supply and logistics chains. It is all about fast adjustment times, short delivery routes and low-cost sales prices. On the customer side, certain standards and requirements have developed which do not tolerate an efficiency value below 100 percent. The companies that best coordinate their supply chain management are likely to emerge as winners.
Differentiation of the supply chain management term from the logistics term
Although supply chain management is often used as a synonym for the term logistics, it is a much more comprehensive field that encompasses control over finances, materials and information of the entire production process from the supplier to the manufacturer and the end customer. Other fields of business administration - including marketing, corporate management and controlling - are also included. In addition to logistics tasks, which are both physical and informational in nature, supply chain management also includes topics such as contract and billing management and workforce management planning.