Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer.
Supply chain management involves coordinating and integrating these flows both within and among companies.
It is said that the ultimate goal of any effective supply chain management system is to reduce inventory (with the assumption that products are available when needed).
As a solution for successful supply chain management, sophisticated software systems with Web interfaces are competing with Web-based application service providers who promise to provide part or all of the SCM service for companies who rent their service.
Supply chain management flows can be divided into three main flows:
* The product flow
* The information flow
* The finances flow
The product flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs.
The information flow involves transmitting ordersand updating the status of delivery.
The financial flow consists of credit terms, payment schedules, and consignment and title ownership arrangements.