Supply chain management (SCM) includes planning, executing, controlling, and monitoring supply activities from procuring raw materials to delivering the product to customers. A supply chain management system provides a match between supply and demand to make the greatest ROI. There are 3 main flows in the SCM:
- Material flow: The product movement from suppliers to customers and product movement from customers to suppliers in case of maintenance and repair
- Information flow: The ability to track orders and delivery progress
- Financial flow: The credit terms, invoices, and other ownership agreements. This flow requires the highest level of cooperation between the members of the supply chain.
Thus, the role of supply chain management is enhancing cooperation and trust among supply chain partners, including suppliers, manufacturers, distributors, retailers, and customers. So, it plays an essential part in the overall success of a retailer. However, according to the 2021’s state of manufacturing report, 97% of retailers admit supply chain management consumes a significant amount of their time. Supply chain management is a long and cumbersome process if you don’t manage it effectively. It limits productivity, causes delays, affects service quality, and leads to unnecessary costs and lost profits.
So, the next section will discuss how ERP in supply chain management can simplify and optimize your supply chain management process for more profitable results.