Supply Chain Management (SCM) – Process or Steps

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The following are the steps involved in supply chain management:

  1. Plan: In this step, the company sets the objectives of the supply chain, defines the metrics for measuring performance, and develops a strategy to achieve those objectives. The plan also includes identifying the demand for the product, forecasting future demand, and planning inventory levels.
  2. Source: In this step, the company identifies potential suppliers, evaluates their capabilities, negotiates contracts, and selects the suppliers that offer the best value. The company also works with suppliers to ensure that they meet the company’s quality standards and delivery requirements.
  3. Make: In this step, the company produces the product or service, manages inventory levels, and schedules production to meet customer demand. The company also monitors production processes to ensure quality and efficiency.
  4. Deliver: In this step, the company manages the logistics of getting the product or service to the customer. This includes managing transportation, warehousing, and distribution, as well as coordinating with customers to ensure timely delivery.
  5. Return: In this step, the company manages the process of returns, repairs, and refunds. The company also works to minimize the number of returns by ensuring product quality and addressing customer concerns.
  6. Evaluate: In this step, the company measures its performance against the objectives set in the planning phase. The company also uses this information to identify areas for improvement and make adjustments to its supply chain strategy. The evaluation phase is a continuous process that helps the company to optimize its supply chain and improve overall performance.

These steps are often referred to as the “Plan-Source-Make-Deliver-Return-Evaluate” (PSMDRE) framework of supply chain management. By following these steps, companies can improve the efficiency and effectiveness of their supply chain, reduce costs, and enhance customer satisfaction.