Supply Chain Management (SCM): Features, Components, Objective, Role & Element

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Supply Chain Management (SCM)

The management of flow of goods & services from the point of origin to the point of consumption is known as Supply Chain Management. It includes the movement & storage of raw materials, work in progress & finished goods from producers to consumers.

What Is the Supply Chain?

Supply Chain consists of all parties involved directly or indirectly in fulfilling the request of customers. It includes manufacturers, suppliers, transporters & retailers etc.

Features Of Supply Chain Management (SCM)

Ability to source

The primary features of SCM is its ability to point out various sources, which means supply chain management has the ability to supply the raw materials or finished goods from the place of origin to anywhere in the world.

Management of inventory

The excellent inventory management is yet considered as another important feature of SCM. It enables stability in tracking of inventory as well as finished goods.

Managing of orders

Another key feature of SCM is managing orders. It enables an organisation to manage an order from the time it is placed till the time of delivery.

Create long-lasting relationship

Another feature of SCM is the ability to create long lasting relationships with customers. It helps an organisation to track and execute orders properly & hold the customers with their business.

Planning & forecasting

The planning & forecasting is yet considered as another important feature of SCM. It enables a business unit to schedule their operations on the right time at the right place. It also helps to minimise the element of risk.

Managing of returns

Another important function or feature of SCM is to manage the return of goods whenever any product of the company is found defective or broken then it will be taken back by the company. It helps an organisation to eliminate various problems.


Another important feature of SCM is logistics. It means the management of effective forward reverse flow & storage of goods & other related information between the point of origin & consumption. It enables a company to meet its commitment on time.

Real time distribution

The real time distribution of information is considered as another feature of SCM. This system provides total Supply Chain information that is visible in the business helps to carry on business smoothly.

Information management ability

The SCM system has an ability to manage information not only within a company but also across the industries & enterprises. It will help the industry in minimising cost & increasing profit.

Faultless execution of strategy

The SCM provides various management strategies with faultless local execution. It means the implementation of strategy can be done without any defect. It also helps to complete the commitment in time.

Component Of SCM

Supply Chain Management is the combination of arts & science that goes into improving by which companies find raw components.

Therefore some of the basic components of SCM are broadly discussed in five heads, they are: Plan, Source, Make, Deliver & Return.


It is considered as the strategy person of SCM generally it aims at managing all the resources in order to meet customer demand. It also ensures development of an efficient & costless Supply Chain for delivering high quality products to customers.


Another important component of SCM is selecting the source. It means the choice of suppliers that will deliver the goods & services to the company for producing products.

It also helps in smooth running of delivery & payment processes in order to improve a healthy relationship among them.


Make or Making is another important component of SCM which is considered as a manufacturing step. It includes a schedule for activities required for production, packaging & preparation for delivery.


Another important component of SCM is the delivery of products. It coordinates various activities concerned with receiving orders from customers & delivery of goods from customers. It also includes receiving payment for customers on goods delivery.


The last but not the least components of SCM which is concerned with receiving defective & excess product return by customers. It supports the customers to have problems with delivered products.

Role Of Supply Chain Management

The role of Supply Chain Management (SCM) is to ensure that goods and services are produced and delivered to customers efficiently and effectively at the lowest price. SCM works on all activities involved in the production and delivery of goods and services, from sourcing raw materials to delivering finished products to end customers.

What Are the 5 Elements of Supply Chain Management?

There are 5 elements of Supply Chain Management: Planning, Sourcing, Manufacturing, Delivery & Return.

These 5 elements are interrelated and play a critical role in ensuring that the supply chain operates efficiently and effectively. By optimising each element, companies can reduce costs, improve quality, and enhance customer satisfaction & retention.

Objectives Of Supply Chain Management

The primary objectives of Supply Chain Management (SCM) are to improve the overall performance of the supply chain. Here are some specific objectives of SCM are listed below:

It increases efficiency. It enhances customer satisfactionIt also aims to manage riskIt promote sustainabilityIt improves profitability.

Why Is Supply Chain Management Important?

SCM is important for several reasons and factors some of the important of supply chain management are pointed below:

  • It improves efficiency and reduces costs throughout the supply chain by optimising processes and reducing waste.
  • It works together with suppliers, manufacturers and distributors with better communication and collaboration.
  • It increased responsiveness by closely using data analytics and supply chain.
  • It can help to manage the risks by the supply chain.
  • It promotes sustainable operation by increasing efficient transportation methods and reducing waste.

What Is SCM Software?

The software or a computer program designed to help manage and optimise the supply chain system is known as Supply Chain Management (SCM) Software.

It includes various types of applications that assist the planning, executing, and monitoring the different stages of the supply chain system, from sourcing materials to delivering the finished products to customers.

SCM software includes modules for demand forecasting, inventory management, procurement, production planning, transportation management, and supplier management.

These modules work together with the supply chain to improve processes and visibility and it helps to identify inefficiencies and opportunities for improvement.

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