The success of supply chain management rests on the fundamentals of bringing the right product at the right time and right price, said G. S. Viswanathan, Business Head and Resident Director, Argonaut Logistics (India), a subsidiary of Argonaut Logistics of the UK.
The term supply chain management (SCM) has been used quite often in recent times, with many connotations, said Viswanathan. . Its origin can be traced to the nineties when transport companies started calling themselves logistics companies. SCM was initially thought to be a straight line separated by two points, namely the seller and the buyer, with the flow of a service in between. Then the idea of a chain of linkage in between the two points brought in a complete shift, challenging the old perspective, said Viswanathan, addressing management students of IFET Engineering College, near Villupuram, at a BL Club guest lecture on supply chain management presented by Central Bank of India. .
SCM is the process by which a business effectively controls the supply of goods from the point of origin to the final place of delivery – either directly to a production line or a nominated point.
Viswanathan said procurement and product development is the starting point of any SCM system because if the necessary controls are absent in the supply of raw materials, components and product development then it becomes difficult to satisfy the end-users’ needs.
The next area to address is goods available at the point of origin.
Having made the goods available at the point of origin, the physical movement of the goods enters the logistics phase. The scope of logistics, which is the responsibility of the manufacturer, seller, vendor or consignor, will be determined by the contract entered into with the buyer, customer or consignee.
Now, with all the above, a clear hub and spoke arrangement emerges both at the origin and the point of consumption. This is where many innovations take place. Supply chain management adopts technology such as a simple standalone warehouse management system or a fully integrated ERP system.