Supply Chain Management

What is supply chain management?

Supply chain management is a planning, monitoring and administration process to optimize the logistics and value chain. All stages of value creation are taken into account: from the extraction of raw materials, forwarding (supplier) to the end customer. Not only the processing of goods is taken into account, but also information and financing processes.

What is a supply chain?

The supply chain ranges from initial processes such as production and processing, shipping, sales to disposal. The path leads accordingly from production to the end product. It is structured at several levels and is part of the value chain. There is a continuous exchange between the areas and functions of the logistics chain. With regard to digitization as part of Logistics 4.0, logistics chains must be optimized. Above all, data and information flows have to be processed faster and faster. Certain telematics software and similar products simplify these processes. They contribute to digital transport management.

What is the goal of supply chain management?

Supply chain management encompasses various goals within the transport industry. The focus is primarily on customer satisfaction and high profitability. In addition, the goals must be distinguished from the logistics. This stipulates that the value chain will remain functional. Goods must be of high quality and delivered on time.

Supply chain management, on the other hand, refers to the overall process:

• How can costs be reduced?
• What optimization options are there?
• Is it worth purchasing new telematics software or hardware?

As a result, these goals are summarized:

• Lower logistics costs or storage costs
• Improved reliability with regard to freight forwarders and deliveries
• Low throughput times
• More flexible deliveries
• Minimizing errors
• Reduction of inventories within the supply chain

Supply chain management is not always easy

Finding common goals is a major challenge for supply chain management companies. In addition, agreements must be made regarding the distribution of costs and distribution of profits. Processes must be transparent in order to be able to pass on knowledge about possible errors. Legal conditions must also be clarified. Furthermore, the requirements of supply chain management have changed over the years due to Logistics 4.0. Many companies are being forced to abandon traditional ways. Globalization demands fast production cycles, short delivery times and extensive customer support. This is where technological advances come into play. For example, digital transport management, which requires storage software and hardware. If modern supply chain management is not used, it could be the end for some companies. The formation of a communication network between partners can also contribute to the optimization of supply chain management. This is a central challenge in the transport industry and for the implementation of Logistics 4.0.

Sample areas for supply chain management

Many companies make use of supply chain management. For example the food industry. With the help of supply chain management, it benefits from high-quality raw materials and packaging materials. Another example is the textile industry. This benefits from supply chain management through lower storage and production costs. The production of the goods is often relocated abroad..