Seven common misunderstandings of SCM supply chain

Seven common misunderstandings of SCM supply chain management

what we are facing today is no longer a simple supply and demand market, but a competitive environment in which new technologies are constantly emerging and the market is rapidly changing. The relationship between manufacturers and their customers and suppliers has become increasingly important. A good supply chain management can shorten the delivery time of products, reduce the overall procurement cost, and add more value to the company and customers. It can not only obtain the benefits of branding, but also reduce the cost of the company by distinguishing from other products and promoting a good relationship with customers, improve the relationship with suppliers, simplify business processes, and make the organization focus on its core capabilities

most managers or academic researchers agree that supply chain management is the key to obtain competitive advantage. However, even the most famous managers and scholars will rack their brains if they ask for a more detailed and consistent definition of SCM

supply chain management is a very broad term, which is often misunderstood. In many different opinions, there is no complete explanation yet

what is supply chain management? Supply chain management is defined as a collaborative strategy, with the goal of integrating upstream and downstream operations to eliminate non value-added costs, infrastructure, time and behavior, and to provide better services to end customers competitively

in order to show what SCM is and is not, some of the most common misunderstandings will be clarified below

misunderstandings need to be eliminated. 1: supply chains are all scams

that is, they are all old and accurate to 1 mm. Read new packaging. Due to the influence of IT technology, the practical development of SCM has increased rapidly in the past 10 years. The rapid improvement of PC computing speed, the ability and variability of communication and data management software have improved new practices, strategies, strategies and applications. In fact, various industries, such as the warehousing Department of VMI (Vendor Managed Inventory) and the collaborative planning, forecasting, replenishment (CPFR) strategy, all work at the same time with the potential of collaborative supply chain management

misunderstanding 2: SCM is a synonym for logistics management

the essence of supply chain management is the integrated planning of operation, strategy and strategy. Such planning requires all activities and processes, such as customer order fulfillment, purchasing behavior, enterprise wide integration of optimal planning and logistics of integrated manufacturing resources, and end-to-end integration. Ultimately, SCM should integrate key business operations and operational relationships in the supply chain

however, logistics (as defined by the Council of logistics management) is a part of the supply chain process, which plans, realizes and controls the flow and storage of goods, services and information from source to delivery according to customer needs

misunderstanding 3: SCM is the only requirement for the company to obtain competitiveness

this is obviously wrong. In order to be truly competitive, the company needs a strong business vision, a clearly defined mission, a product marketing plan, and well planned strategies (such as supply chain strategy and "waterfall" operation strategy)

misunderstanding 4: SCM is about supply management

supply management is only about procurement and supplier management. SCM is about the whole end-to-end flow from raw materials to final consumption, as well as the integration of supply and demand

misunderstanding 5: supply chain is not as important as value chain management (VCM)

value chain management examines supply chain from the perspective of value increase. Obviously, this is a very important angle. However, without SCM's attention to integration and synergy, value chain analysis may lack the necessary structure, and fail to achieve the ultimate goal of combining with other materials most easily. In effect, SCM and VCM complement each other. (related article: effective supply chain management in the information age)

misunderstanding 6: SCM is a cluster of suppliers

this view is only correct in one point. If "a cluster" refers to a group of enterprises working together towards a common goal, supply chain partners are of course the horizontal clusters of value-added suppliers. However, SCM goes beyond the traditional definition of cluster, which restricts enterprises to the same industry or physical location. If each supplier in the chain increases the value of the overall network cluster, further development of supply chain clusters will lead to more profits for end customers

misunderstanding 7: SCM is equivalent to ERP

supply chain focuses on end-to-end integration. However, er electronic tensile testing machine is composed of one (single arm) or two (portal) vertical bearing columns. P focuses on integrating all application system transactions and becoming an enterprise wide system. Therefore, ERP focuses on internal channel integration and provides management information required for enterprise wide decision support. Many ERP implementations cannot actually support supply chains that point to processes and integration because they lack well-defined operational improvement plans from the beginning. (end)