In the early 1990’s, software developers who integrated internal processes for manufacturing and accounting in “Enterprise Resource Planning” programs. A few years later, “supply chain management” software tools were developed to integrate the enterprise with its suppliers and customers under one information technology infrastructure. What had been based on rigid “electronic data interchange” communications became linked by Internet browsers. But supply chain management has evolved from the sophisticated software program to a “just-in-time” delivery service. SCM provides now assure the timely delivery of raw materials and spare parts, repairs and service to an enterprise’s production facilities (manufacturing, packaging and distribution).
- Supply Chain Management cuts out inefficiencies and cost through:
- A common, collaborative business framework with commercial partners.
- Rapid exchange of information.
- Assured delivery schedules.
- Faster entry into new markets and faster delivery to customers.
- Reduced inventories.
- Availability of analytical and management tools.
SCM may, for example, enable manufacturers to anticipate demand for specific products from specific customers and to reinforce that demand by making special inducements for volume purchases. This expedites collaboration in the cycle from demand forecasting to matching of demand to supply, allocating supply to customers, committing supply and promising deliveries to final delivery and replacement of the raw materials for restocking in the customer’s demand cycle.