Supply Chain Management 101

Supply Chain Management Components

The following are the basic components that comprise supply chain management. Supply chain management software should handle each of these well.

1. Planning - Supply chain planning consists of developing benchmarks to monitor the supply chain for optimal resource use, minimum total cost, and maximum value to the customer.

2. Sourcing - Supply chain sourcing entails developing the costing, inventory, quality, shipping and payment methods with suppliers and associated benchmarks for monitoring partner relationships.

3. Production - This is the manufacturing step. Schedule the activities necessary for production, testing, packaging and preparation for delivery. As the most metric-intensive portion of the supply chain, measure quality levels, production output and worker productivity.

4. Delivery Logistics - This component of supply chain management deals with order tracking and fulfillment, determining warehouse locations, fleet management, and invoice processing. This can be quite a complex operation to manage well.

5. Returns Processing - The critical component of supply chain management that deals with customer returns and customer support.