I covered the basics of ERP previously, and thought I’d move on to supply chain management (SCM), which we’re also featuring in tomorrow’s TEC Newsletter (go to Newsletter archives), with lots of white paper goodness, to boot.

So,

What is SCM?
Supply chain management (SCM) systems coordinate the movement of products and services from suppliers to customers (including manufacturers, wholesalers, and retailers).

These systems are used to manage demand, warehouses, trade logistics, transportation, and facilities, as well as the movement and transformation of materials on their way to customers.

SCM applications link people and organizations (and their activities) to information and resources. The ultimate goal is for all components of the chain to exchange information with maximum efficiency and effectiveness, in order to obtain best results for all parties.

A comprehensive SCM solution allows you to focus on and optimize key components of your supply chain operations:

• demand management
• order management
• warehouse management
• production and supply planning
• service parts planning
• supplier relationship management
• supply chain event management
• international trade logistics
• transportation management

The difference between managing these components effectively and mismanaging them can mean the difference between success and disaster.

Why An Effective SCM Evaluation Process is Vital
IT disasters are not just for SMBs. Even the biggest companies in the world can trip over their supply chains.

In May 2001, Nike announced that sales for the preceding quarter had been $100 million (USD) lower than expected. The official reason, according to Nike? Confusion in its supply chain.

What’s more, as soon as Nike announced its supply chain breakdown, the company’s stock plummeted 20 percent—making a $100 million loss look nearly trivial.

Later that year, Cisco announced a $2.2 billion inventory write-off. The culprit, once again: supply chain problems. This fiasco was—and still is—the largest inventory write-off in history.

These debacles are not necessarily the direct result of poor software selection or faulty SCM evaluation—but they are potent reminders that software evaluation can be the single most important factor behind operational success—or organizational failure.

How the Software Selection Process Can Help
• Understand how different applications will improve supply chain delivery, cost performance, and order execution.
• Review warehouse management features and logic for pick, put-away, and replenishment functionality.
• Select vendors that support appropriate transportation management for your region or globally.
• Evaluate collaboration environments and relationship terms and details for partners within your supply chain.
• Ensure the technology integrates across multiple enterprises, in a way that is appropriate for your environment.

7 Benefits of SCM
Selecting the right SCM system can help get you on the right track.

1. Increase your top-line profit growth through supplier collaboration
2. Increase the quality of your customer service
3. Decrease stock-outs
4. Reduce your inventory carrying costs
5. Reduce your operating costs—corporate-wide
6. Create supply chain visibility among your trading partners
7. Respond quickly to changing market conditions—and adjust accordingly

Want to learn more about SCM applications and how to select the right one for your organization? Visit our SCM Evaluation Center, where you’ll get the skinny on demand management, supplier relationship management (SRM), supply chain event management, supply chain optimization, transportation management systems, and warehouse management systems (WMS).

Don’t forget–you can request other tutorials by leaving comments below.

Running out of space for your words? Consider signing on as a Featured Author for TEC News (circulation over half a million worldwide to date).

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Comments

JAHEER HUSSAIN on 28 November, 2007 at 12:34 am #

Thanks.
Good one for understanding of BASIC-SCM.


GURURAJ on 28 November, 2007 at 1:23 am #

I would like to learn more on multi channel order management managment for optimising the supply network.
we are trying to design multi channel order managment application i.e., online ordering.


R.Sadeghi on 28 November, 2007 at 3:22 am #

thanks.
your text was useful.


Ahsan on 28 November, 2007 at 5:19 am #

interesting article, yet cleared some concepts


sharavanraman on 28 November, 2007 at 7:25 am #

good article.


majid azizi on 28 November, 2007 at 7:39 am #

i need some information about scm for my student MS. thank you for your information.


virendra on 28 November, 2007 at 8:56 am #

i need some info abt SCM for my self i am SAP-PP certified consultant


N.V.R.RAJA on 28 November, 2007 at 9:15 am #

Iam an ERP consultant and Ineed to guide the user manager’s on change management.
Also help in implementation.
N.V.R.RAJA


Mark Harris on 28 November, 2007 at 9:40 am #

As we move toward a global organization, SCM is vital to our growth and efficiency.


David Clark on 28 November, 2007 at 1:22 pm #

Hi all,
Thanks very much for your comments. I’m glad this was useful. Just wanted to point out some further resources that might be of use to you:
If you’re looking to research RFIs or business requirements, our SCM software evaluation reports provide extensive information about product capabilities for the top vendors (and contendors) in the field.
If you’re looking for a comprehensive overview of SCM functionality, you might want to check out our SCM RFP templates. These templates are also useful for establishing your selection criteria for supplier, manufacturer, logistics, transportation, and customer business processes. An interesting side note: these criteria also expose global and cross-enterprise trade issues.
You can also see our SCM Evaluation Center, which provides a wealth of research resources, including white papers, case studies (good for reference checks), and articles. There’s also a handy “Start Your SCM Comparison” button which generates a shortlist of products that meet your needs. I particularly recommend that you take it out for a spin.
Thanks again,
David


Emma Orsini on 28 November, 2007 at 1:25 pm #

Thanks for the article. I need some information about SCM and healthcare.


bryan Jeon on 28 November, 2007 at 6:46 pm #

Hi,

i’m interested in SCM. Usaully SCM is divided into SCP & SCE.
can i get some information about the scm trend based on above classification


Rendani Maremba on 29 November, 2007 at 12:38 am #

I beleive the tool will help me know more about management


Ahmed Ali on 29 November, 2007 at 12:56 am #

Thanks:
Still we need more information about exploaitation of IT in SCM. It will be more useful when these information integrated with success stories of business organizations.


srinivasan on 29 November, 2007 at 1:24 am #

good piece of information.pls do send more details about distribution management


rajesh k on 29 November, 2007 at 3:22 am #

Any products/systems working on reducing carbon emmisions & monitoring and monitoring to grrenhouse norms.


kanan on 29 November, 2007 at 4:45 am #

Hi,
thanks for the article .i need some information about SCM in company as work in project field. like EPC CONTRACTOR.


Ram on 29 November, 2007 at 9:00 am #

This is very good information regarding SCM. I need how SCM work and effect the retail market.


Noor Ali on 30 November, 2007 at 1:00 am #

Hi,

Its realy good, and thanks for the articale, Its good for general understanding of SCM. I need more infomration like how SCM more benefical in service industries.


elham on 30 November, 2007 at 11:34 pm #

Hi,
I need a best practice of scm (prefer PPT format)
from one of the top SCMs of all over the world.
my job is suppliers developer
regards


Rajendra Mahajan on 1 December, 2007 at 2:06 pm #

I am IT Service Delivery Manager. I want to prepare supply chain management.
So pl. send study material.


debjani on 2 December, 2007 at 6:23 am #

very helpful tutorial for basics.


elham on 2 December, 2007 at 11:17 pm #

Hi,
I need a best practice of scm (prefer PPT format)
from one of the top SCMs of all over the world.
my job is suppliers developer
regards


R RAGHAVENDRAN on 3 December, 2007 at 2:59 am #

Sir, I am working in TVS GROUP COMPANY.
My job is planning the BOF MATERIAL FOR day to day production for commercial & light commercial vehicle.

Already I completed My MBA ( MM ) Currently I am doing my PGDSCM IN CII INSTITUTE OF LOGISTICS.

Please send more case study papers it will be very useful for SCM students.

r raghavendran


R Chandramouli on 4 December, 2007 at 12:41 am #

I would like to receive white papers and case studies about SCM. Also, the best practices and the know-hows of SCM in the consulting space especially Supply Chain Optimization.

Thanks
Chandramouli


David Clark on 6 December, 2007 at 4:37 pm #

Hi all,
Thanks again for your comments. Be sure to check out our followup blog post, Supply Chain 201: Editors’ Picks.


V RAJAGOPAL on 7 December, 2007 at 3:30 am #

Hi All

I would like to know the best business practices under each components of SCM

Thanks


Uti on 7 December, 2007 at 4:09 am #

Hi Friends
I need to know how sap can be used for marine fleet management?
Best regards


Tariq on 16 December, 2007 at 1:27 am #

As they say ‘Brevity is the soul of wit’
Nice Article! I am looking for Best Practices - thanks


ganesh s k on 26 April, 2008 at 10:18 am #

its simplicit to understand.i m pursuing masters degree in prod splz in mfg & have to submit project on plm in mfg sector. kindly guide on its implementation in general for small scale ind


David Clark on 29 April, 2008 at 2:05 pm #

Hi Ganesh, thanks for commenting. I’d recommend you take a look at the white papers at http://whitepapers.technologyevaluation.com. In particular, you may be interested in the white paper “Top 10 PLM Pitfalls to Avoid,” at http://whitepapers.technologyevaluation.com/view_document/5454/Top-PLM-Pitfalls-To-Avoid.html. Best of luck, David


HENRY BERNALDO on 6 July, 2008 at 10:27 pm #

VERY USEFUL

Henry Bernaldo
GSE Warehouse and Store Incharge
Abu Dhabi Airport Services
P.O. BOX 3668 AUH, UNITED ARAB EMIRATES
Tel: +9712-5054707
Fax: +9712-5757437
Email: hbernaldo@dcaauh.gov.ae


Naz on 7 July, 2008 at 12:50 am #

thanks for the article .i need some information about SCM in a univeristy Environment


Anas on 7 July, 2008 at 12:57 am #

Thanks for the Article,
One question, what does inventory write-off means, and how did it cause Cisco 2.2 Billion losses, could have Cisco done something that time to avoid this fiasco?

Regards,
Anas AbdelHafez


Guss Kabbara on 7 July, 2008 at 1:23 am #

For best practices of Supply Chain you might try and google “SCOR”. Lots of documentation exist on this topic. Or you might try Amazon that has many books on the Supply Chain. I’ve just order a Book from Amazon “Supply Chain Excellence: using the SCOR model”. Also read Esstentials of Supply Chain Management which is an excellent book if you want to start getting to know about the subject.
I can be reached @ Email:gkabbara@yahoo.com for further discussion on the matter.


Salman Hijazi on 7 July, 2008 at 1:30 am #

Useful information about SCM also for beginners.


John Barns on 7 July, 2008 at 2:31 am #

Thanks for the Article,
This is much helpful
Regards,
John Barns


nitin on 7 July, 2008 at 4:38 am #

It’s indeed a good information.


Sohail Zaidi on 7 July, 2008 at 5:09 am #

Good Information about SCM


bakhtiyar salam(politeknik aceh) on 7 July, 2008 at 5:48 am #

i want to know about material data center articel, becouse next time i want creat the data center services in indonesia expecialy in Aceh after tsunami.can you give me information its. thanks you


Jesse James Mutisya on 7 July, 2008 at 8:11 am #

The most insightful article on SCM I have ever read. Give us more for business today need such information.


Ly Chheng on 7 July, 2008 at 8:12 am #

Thank you very much for your information about SCM. I still need more about information relate with Apparel management, HRM. Best Regards LY Chheng


Pravin on 7 July, 2008 at 1:44 pm #

Good article, it will help businesses


Ramaneswara Rao Rongala on 7 July, 2008 at 2:02 pm #

It is a good article. Keep posting such useful articles, so as to enable readers update.

Regards

Ramaneswara Rao Rongala
sabita_rao2001@yahoo.com


p nyamai on 9 July, 2008 at 4:32 am #

I would like to know the link between market research (for prices) and SCM. But keep up the good work.


JAYESH DASADIYA on 15 July, 2008 at 11:53 pm #

Dear Sir,

Very usefull information regarding SCM. It gives us very basic of SCM, which help us how is the work flow in our organisation.


Robert McDonald on 4 September, 2008 at 4:35 pm #

SUPPLY CHAIN MANAGEMENT MADE EASY…

Folks I have been in Supply Chain Management for over 35 years all the way from assistant buyer (Chaser) to Supply Chain Director and International Sourcing Director. I have lived and worked for some very large, well known companies and some that you have never heard of and have lived and worked in almost every country in the world. In those 35+ years I have saved companies untold
Millions of dollars and have never failed to save any company that I have been employed by at least 10% of their Operating Costs and in most cases at least 20+%.

I only say the above to let you know that I have at least a little experience in the field of purchasing, supply chain management and cost saving.

Now with all that said what I want to tell everyone is that you don’t need all the high priced Six-Sigma people or the fancy consultants - all you need are highly qualified, well trained employees and even higher qualified and trained management. What you don’t need are people that come into the category of “last week I couldn’t spell buyer now I are one”.

You see - Supply Chain Management is really a very simple process - all it consists of is getting the best possible price while also getting a product that meets or exceeds the required specification and having it delivered on time, every time, never to early, never to late.

Yea yea I know what you are thinking - easy to say but impossible to do, at least consistantly…..WRONG! It can be done, it has been done, it is being done, I have done it and others have as well and most importantly you can too!

A lot of it comes down to “pay me now or pay me later” - if you have ill trained and under qualified staff you will get higher prices, iffy quality and crap delivery - why? Because it allows your suppliers to control you instead of you controlling your suppliers. Why should a supplier reduce their prices when no one can give them a good reason to do so? Why should they give you the required quality when no one forces them to? Why should they deliver on time when no one does anything but complain? Now I’m going to tell you what happens when the above happens - you threaten the supplier with various things you will do to him if he does not shape up - correct? Well if you don’t, you may be one of the lucky few who may really know what you really need to do.

The simple answer is that threats don’t work over the long haul. Now they may work in the short term but as soon as the supplier that has been threatened and forced to reduce their prices finds a new company to sell your stuff to he will drop you like a hot rock and leave you at best a ‘second choice’ supplier or at worst no supplier at all. Or if they cannot find one they will reduce the quality and delivery of your goods to attempt to recoup some of their losses. So where does that leave you - no better off and normally worse off than you were before.

I will stop for now but if anyone would really really like to get their costs under control I will be happy to help at NO COST - Free! - I want to give back some of my knowledge and experience to help American companies to become more efficient and cost effective. If you are not interested in getting your company under control and you are happy to lay off staff or out source your work in the erroneous thought that it will make everything Ok then I wish you well.

Bob McDonald
rfm1808@msn.com


Harsh N Rai on 26 November, 2008 at 12:16 am #

Thanks for giving information related
supply chain management.
it has nicely covered about SCM and very understanding to every body whose working in this
sector.

Thanks,


Dhanasekaran.G on 26 November, 2008 at 12:30 am #

Dear All,

Help me if possible to prepare Questionnaire for me in SCM

Title : A Study on Effectiveness of supply chain Management in personal Care Products[FMCG] with special reference to Hindustan Unilever Limited in Erode district.


ramadan alakdar on 29 November, 2008 at 1:37 pm #

your text is very great.Thank you


Thiago on 3 April, 2009 at 1:00 pm #

Dear all, I’m a student about Brasil, and my teacher want a “Quadrant about Supply Chain Management” (2008), I try but dont find nothing, if someone to have this quadrant please send me a e-mail??

Thankss
Thiago


Hussaini on 27 November, 2009 at 4:39 am #

Thanks for sharing Knowledge.
could you please help me with more Information on SCM.

Thanks and Regards


Ferman on 7 December, 2009 at 12:33 am #

Dear all,

Although it is a short article but it is very informative. We implemented SCM in our company and we we have got positive results. We cut costs on a large scale. And the process is going on.

If somebody has the case study about the implementation of SCM in the global furniture companies please send an e-mail to address i.ferman@gmail.com


D. Anandasubramanian on 23 April, 2010 at 12:58 am #

Whatever the blog discussing is good & my suggestion is for its development & for the subject it should present some white papers & research articles.

Stop not with this. But to flash news the modern trend. Should release some articles on all the verticals. Should encourage subject peoples by giving statistics & datas on it.

Todays hot topics are WH/Distribution Mgmt/3PL/4PL/7PL/Inventory/WMS/TECHNOLOGY impact & more.


anusha on 30 October, 2012 at 8:00 am #

hi
I want to know about the all oracle applications.
oracle scm is oracle technical application or oracle finance application?


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