Write an essay on the main functions of supply chain management (SCM) and its processes and components.

Supply chain refers to all the facilities and processes
used in supply of goods and services; from procurement of raw material, through
manufacturing operations, up to delivery to final user, and supply chain management
(SCM) refers to Management of all operations within a company impacting and interfacing
other sections of the supply chain to improve entire supply chain
performance.

The main functions and components of SCM
include:

• Defining business boundaries and
  relationships


• Managing demand and
  supply


• Logistics


• Purchasing


• Selling
  system interface


• Manufacturing system
  interface


• Product design
  interface

Defining business boundaries and
relationships is at the core of all SCM initiatives. The most important of these
business boundaries relates to the decisions on outsourcing. In addition to general
concept of what to manufacture and process in-house, these boundaries also refer to the
roles played by supplier and buyers in each other’s business decision and operational
activities.

Demand management is managing the demand for
goods and services along the supply chain. The basic demand is the demand for the
ultimate product or service from the end user. To meet this demand of end user,
different links in the supply chain need to supply some goods or service to the
following link in the chain. In turn to meet their supply commitment they need inputs
from the previous link.

Logistics refers to all the
processes involved in storing, moving, transporting or in any other way handling
material. Role of logistics in activities before start of material and after completion
of manufacture up to transportation to the immediate customer has been well recognized
in the past also. But the logistics cost and effectiveness is also affected by, and in
turn affect all other activities along the supply
chain.

Purchasing has the closest links with the supply
side of the supply chain. It plays a key role in the total SCM functions. At strategic
level, purchasing plays a decisive role in decisions on and implementation of business
boundaries. It acts as a link between the vendors and the company to get involvement and
help of vendors in matters like purchased material specification, matching of lot sizes
and transportation packing.

Selling is the closest link
with the demand side of the supply chain. It is directly responsible to help  customer
know, select, buy, pay for, and take away company’s product. These products may be sold
to the customers directly or through a distribution network. Sales plays an important
part in decision on design of the distribution and is directly involved in its
day-to-day operations.

Manufacturing represents the core of
internal operations of a company. No SCM policies, can operate in isolation from the
manufacturing activities. Manufacturing supports SCM in many ways like, reducing
manufacturing lead times and supplying material closely matched to customer lot size and
time requirements.

Product design has significant impact on
efficiency and effectiveness of both supply and demand side of supply chain. In addition
the basic quality of the finished product sold to the end user can be improved
substantially by better collaboration among channel partners.