Supply chain management (SCM) is the process of planning, implementing, and controlling the operations of the supply chain with the purpose to satisfy customer requirements as efficiently as possible. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption. The term supply chain management was coined by strategy consulting firm Booz Allen Hamilton in 1982.

According to the (CSCMP), a professional association that developed a definition in 2004, Supply Chain Management "encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, Supply Chain Management integrates supply and demand management within and across companies."[1]

Supply chain event management (abbreviated as SCEM) is a consideration of all possible occurring events and factors that can cause a disruption in a supply chain. With SCEM possible scenarios can be created and solutions can be planned.

Some experts distinguish supply chain management and logistics management, while others consider the terms to be interchangeable. From the point of view of an enterprise, the scope of supply chain management is usually bounded on the supply side by your supplier's suppliers and on the customer side by your customer's customers.

Supply chain management is also a category of software products.

Opportunities enabled by Supply Chain Management

The following strategic and competitive areas can be used to their full advantage if a supply chain management system is properly implemented.

Fulfillment. “Ensuring the right quantity of parts for production or products for sale arrive at the right time.”(Haag, Cummings, McCubbrey, et al., 2006, p. 46). This is enabled through efficient communication, ensuring that orders are placed with the appropriate amount of time available to be filled. The supply chain management system also allows a company to constantly see what is on stock and making sure that the right quantities are ordered to replace stock.

Logistics. “Keeping the cost of transporting materials as low as possible consistent with safe and reliable delivery.” (Haag, Cummings, McCubbrey, et al., 2006, p. 46). Here the supply chain management system enables a company to have constant contact with its distribution team, which could consist of trucks, trains, or any other mode of transportation. The system can allow the company to track where the required materials are at all times. As well, it may be cost effective to share transportation costs with a partner company if shipments are not large enough to fill a whole truck and this again, allows the company to make this decision.

Production. “Ensuring production lines function smoothly because high-quality parts are available when needed.” (Haag, Cummings, McCubbrey, et al., 2006, p. 46). Production can run smoothly as a result of fulfillment and logistics being implemented correctly. If the correct quantity is not ordered and delivered at the requested time, production will be halted, but having an effective supply chain management system in place will ensure that production can always run smoothly without delays due to ordering and transportation.

Revenue & profit. “Ensuring no sales are lost because shelves are empty.”(Haag, Cummings, McCubbrey, et al., 2006, p. 46). Managing the supply chain improves a company’s flexibility to respond to unforeseen changes in demand and supply. Because of this, a company has the ability to produce goods at lower prices and distribute them to consumers quicker than companies without supply chain management thus increasing the overall profit.

Costs. “Keeping the cost of purchased parts and products at acceptable levels.” (Haag, Cummings, McCubbrey, et al., 2006, p. 46). Supply chain management reduces costs by “… increasing inventory turnover on the shop floor and in the warehouse” (&ldquo Supply chain management,” 2006) controlling the quality of goods thus reducing internal and external failure costs and working with suppliers to produce the most cost efficient means of manufacturing a product.