A supply chain management system connects manufacturers, companies, and warehouses to provide raw materials and finished products. It simplifies production and keeps costs down. SCMS is also a non-profit organization that sends medicines and supplies to poor nations.
A supply chain management system is a collection of manufacturers, companies, and warehouses that provide the raw materials and finished products needed by companies when they need them. A company refines a raw material, then sends it to a company that makes a component, who then sends it to a company that makes a finished product. The final product ends up in a retail store. Proper use of supply chains simplifies the refinement and production of goods while keeping costs down. Supply Chain Management System (SCMS) is also the name of a non-profit organization that sends medicines and supplies to poor nations.
Understanding a supply chain management system requires a basic understanding of modern manufacturing. Most companies do one thing and pass their product on to the next company. For example, a company may make bolts that are used for washing machines, but not cars. Their bolts are sent to another company that makes the whole machine or another component of the machine.
For this process to work efficiently, companies use a supply chain management system. These systems place a company in the middle of an interconnected network of companies. On the one hand there are all the companies that supply the materials for a product. On the other hand, there are all the companies that require the product. Each part has to run smoothly, or all related companies falter with overproduct or underproduct.
Continuing with the bolt example, the company can receive various supplies from different companies, then turn those supplies into bolts. Bolts are shipped to a handful of manufacturers of both finished products and product components. Additionally, they can package bolts for distribution to retail stores or overstock bolts for onward shipment.
Moving goods and materials from one place to another can be a complex process. In order for this entire operation to run smoothly, two things need to happen. First, people need to be in the right places at the right time. Second, raw materials and component goods must exist in sufficient quantities for people in the next stage of production.
A complete supply chain management system is made up of a large number of people and places. The raw material is harvested from the earth or produced, then transformed into a usable form. Raw materials are shipped to a multitude of different manufacturers who make components for retail products. This step is repeated over and over again until the component collection reaches a final product location where it is processed into retail merchandise. After final production, they are shipped to retail stores and sold to consumers.
Outside of the corporate definition, the supply chain management system has another important meaning. SCMS is an arm of the Partnership for Supply Chain Management (PFSCM). The PFSCM is a non-profit organization that focuses on moving goods and supplies in poor or developing nations. SCMS specializes in moving retroviral vaccines and other medicines to countries around the world.
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