The Procurement Glossary » Supply Chain Management (SCM)

Supply Chain Management (SCM)

Inventory & Logistics

Also known as: SCM

Definition

The coordination of all supply-chain activities to deliver goods efficiently, reliably and at the right cost.

Explanation

SCM integrates sourcing, production, inventory and logistics into a coherent flow. Procurement is a key SCM function, focused on the supply base; together they optimise cost, service and resilience end to end.

Example

SCM balances factory schedules, inventory and shipping so products reach shelves on time and at target cost.

Related terms

• Supply Chain — The end-to-end network of organisations, people, activities and resources that move a product from raw material to end customer.
• Logistics — The management of the movement and storage of goods — transport, warehousing, handling and delivery.
• Supply Chain Mapping — Documenting the suppliers, sites and flows in a supply chain, including lower tiers, to reveal dependencies and risk.
• Inventory — The goods and materials a business holds for use, sale or production.

Frequently Asked Questions

What is Supply Chain Management (SCM)?

The coordination of all supply-chain activities to deliver goods efficiently, reliably and at the right cost. SCM integrates sourcing, production, inventory and logistics into a coherent flow. Procurement is a key SCM function, focused on the supply base; together they optimise cost, service and resilience end to end.

Can you give an example of Supply Chain Management (SCM)?

SCM balances factory schedules, inventory and shipping so products reach shelves on time and at target cost.

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