Definition of supply chain

Definition and content of supply chain management

The modern business environment has brought great pressure to enterprises, not only to sell products, but also to provide customers and consumers with satisfactory services, so as to improve customer satisfaction and make them feel happy. Kotler said: "Customers are God. Without them, enterprises cannot survive. All plans must be based on retaining customers and satisfying customers.". To win customers in the domestic and international markets, supply chain enterprises must be able to respond to customers' needs quickly, quickly, flexibly and cooperatively. Facing the changing supply chain environment, building a happy supply chain has become the development trend of modern enterprises.

Supply Chain Management (SCM for short) refers to the management method of effectively organizing suppliers, manufacturers, warehouses, distribution centers and distributors to carry out product manufacturing, transshipment, distribution and sales in order to minimize the cost of the entire supply chain system under the condition of meeting a certain level of customer service. In the narrow sense, supply chain management is to reduce inventory by improving the efficiency of information transmission of production, manufacturing, inventory and sales. In the broad sense, supply chain management needs to consider the market planning including product development and reconsider the business model. Supply chain management includes five basic contents: planning, procurement, manufacturing, distribution and return.

Planning: This is the strategic part of SCM. You need to have a strategy to manage all resources to meet customers' needs for your products. A good plan is to establish a series of methods to monitor the supply chain so that it can effectively and cost-effectively deliver high-quality and high-value products or services to customers.

Procurement: select the supplier that can provide goods and services for your products and services, establish a set of pricing, distribution and payment processes with the supplier, create methods to monitor and improve management, and combine the management process of the goods and services provided by the supplier, including picking up, verifying the bill of lading, transferring the goods to your manufacturing department and approving the payment to the supplier.

Manufacturing: The activities required to arrange production, testing, packaging and preparation for delivery are the most measured parts of the supply chain, including the measurement of quality level, product output and worker productivity.

Distribution: Many "insiders" call it "logistics", which is to adjust the user's order receipt, establish a warehouse network, send delivery personnel to pick up and deliver goods to customers, establish a goods pricing system, and receive payment.

Return: This is the problem handling part of the supply chain. Establish a network to receive defective and redundant products returned by customers, and provide support when customers have problems with their application products.