What is supply chain management? And the difference between it and logistics services?

A supply chain is a network between a company and its suppliers for the production of a certain product and its distribution to the final buyer.

This network includes many activities, individuals, entities, information, and resources.

Companies develop their supply chains to reduce costs and keep their business competitive.

Supply chain management is an important process because an optimized supply chain leads to lower costs and faster production cycles.

Supply management:

Supply chain management is the method of coordinating the various activities required for the production of goods and services and their delivery to corporate customers, depending on the business in question.

This includes monitoring the manufacture of products; shipment of products by air, sea, and land; ensuring that quality standards are met; and ensuring the delivery of products to customers.

The importance of SCM supply chain management:

is important because it helps achieve many business goals. 

For example, control over the manufacturing process improves product quality and reduces the risk of recalls and litigation.

It also helps build a strong brand for consumers, and at the same time, controlling shipping procedures can help improve customer service by avoiding periods of costly shortages and overcrowding.

Supply chain management in general offers many opportunities for companies to enhance their profit margins. 

This is especially important for companies with large international operations.

Elements of SCM supply chain management:

and SCM have four essential elements that companies need to develop expertise in all these elements in order to build an efficient supply chain and avoid costly bottlenecks. These elements are:

§  Component I/integration:

Integration is the heart of the supply chain and is seen as the mind and heart of supply chain operations.
Planning is essential for long-term success.
Integration is a technological process that works closely with the functions and elements of the supply chain.
The integration gives supply chain visibility into every business and interaction. The main components of integration are data, their collection, storage, and use.
Supervision of supply chain integration means coordinating communication between the rest of the supply chain to achieve timely and effective results in the manufacturing process.
This often means looking for new software and other technologies to strengthen interdepartmental communication, which will reduce time-consuming and costly errors

§  Component II / process:

Strategy is just as important as maintaining a strong supply chain, day-to-day operations are the backbone of what manufacturers do, and supply chain managers monitor ongoing processes to ensure everything is on track.
Many manufacturers today operate using lean manufacturing strategies and technologies. This means that processes are constantly evaluated for maximum performance and efficiency.
Whether it's monitoring processes and equipment to maximize performance, minimize work, or slow down shift patterns during production, process teams can significantly improve the supply chain.

§  Component III | purchase:

Sourcing is the process of finding, evaluating, and engaging suppliers to provide goods and services to your business while purchasing is the process of purchasing goods and services.
In B2B sales, the purchasing function usually manages the purchasing and supply functions to ensure that the organization has access to everything it needs to manufacture a product or provide a service, including materials, supplies, tools, and equipment.
This means staying ahead of the process and ensuring everything is in place before the process, which strains the 

company's cash flow

§  Component IV / distribution:

The supply chain ends when a product or service is delivered to the customer, but the provision of a product or service implies a well-planned and managed distribution and logistics organization.
Most companies today use logistics software to manage the shipping process, whether they handle it themselves or outsource it to an external provider.
These logistics providers also mainly deal with services such as transportation, warehousing, delivery, and other related operations.
However, as soon as these operations are taken care of, the products are quickly transported from the warehouse to the customer. Balancing supply and demand is especially important for the growth of global business networks.

§  Principles of SCM supply chain management:

There are several basic principles on which SCM is based, the main ones are:

Adapt your supply chain to customer needs

Business and supply chain specialists to understand the needs of their customers and divide them into different groups called "sectors" to better understand them.

The basic way to divide customers based on sales volume or profitability is ABC analysis, which can also be carried out by product, trading channel, and industry.

It is also important to anticipate the needs of customers. Once customer needs are anticipated, the supply chain must be adjusted to meet those needs.

Customize your logistics network

After dividing customers based on different requirements, the SCM manager needs to design a logistics network that meets the needs of different sectors. The SCM must prioritize deliveries and make appropriate arrangements for the speedy delivery of items marked as urgent.

Supply chain specialists are trained to share data with business partners to avoid unnecessary inventory, and SCM managers should use order data wisely.

Standardization and differentiation go hand in hand, and some cosmetic companies manufacture only one product, and not one in each country, which can be sold throughout Asia. 

Outsourcing is a common thing, but managers should outsource strategic and not at all basic experience. This principle will stand the test of time.

Activity-based costing (ABC) is applied to determine the profitability of a client, but time-driven activity-based costing is best used to understand changes in activities, processes, products, and customers. 

Although the terms Supply Chain Management and logistics management are often used interchangeably, one link in the supply chain, namely Logistics, is different from the supply chain.

Logistics refers specifically to the part of the supply chain that plans and manages the movement and storage of goods and services from their point of origin to their final destination. Logistics management begins with raw materials and ends with the delivery of finished products.

Successful logistics management ensures that there are no delivery delays at any point in the chain, that products and services are delivered in good condition, and that companies keep costs low.