Components of Supply Chain Management

 What is Supply chain?

Supply chain is a series of activities involved in production, distribution and delivery of a product or service from source to the end consumer.
And managing entire process is known as supply chain management.

Main components of Supply chain:

1. Planning
2. Information
3. Sourcing
4. Procurement
5. Inventory
6. Production
7. Logistics
8. Reverse logistics

1. Planning:
Planning is the important component of supply chain management, planning is required in every step of the supply chain process, such as demand planning, supply planning, production planning, sales & distribution planning etc. Without proper planning it’s very difficult to carry out the activities any complete the process efficiently.

2. Information:
Information is a key component of supply chain management because without proper flow of information things cannot move and the process cannot be completed.  We will see few examples here. If a production unit does not have the information of upcoming orders, it will not be able to do proper production planning. If proper information not provided by the order management team to the transport department, they will not be able to plan & schedule deliveries on time. So the proper flow of information from the very 1st step (order login step), can help all departments to perform their activities effectively.

3. Sourcing:
Sourcing is the strategic process of identifying, evaluating and finalizing supplier/ vendor for the procurement of goods or services.

4. Procurement:
Procurement is the process of purchasing  something (goods or services) in a systematic way with proper planning.

5. Inventory: Inventory is a crucial component, whatever items a company have in the stock called as inventory. Inventory includes raw material, semi finished materials, finished materials, packing materials etc.

6. Production: Production is the process of transforming raw materials into finished products with the help of men & machines. Production department receives, analyzes the inputs and generates the output which meet the specific requirement.

7. Logistics: Logistics is the process of planning, implementing, and controlling the efficient flow and storage of goods, services, and information from the point of origin to the point of consumption. It aims to meet customer requirements and includes various activities such as transportation, warehousing, inventory management, order fulfillment, and supply chain coordination. Logistics ensures the right product reaches the right place, at the right time, in the right condition, and at the right cost.

8. Reverse logistics: Reverse Logistics is the process of managing the return of goods, materials, or products from the end customer back to the manufacturer, supplier, or designated locations for purposes such as recycling, refurbishing, repairing, or proper disposal. It is the reverse flow in the supply chain and focuses on minimizing waste, recovering value, and promoting sustainability. Examples include the return of defective goods, recycling programs, or product recalls.