Supply chain management is the combination of art and science that goes into improving the way your company finds the raw components it needs to make a product or service, manufactures that product or service and delivers it to customers.

The following are five basic components for supply chain management.

SCOR is founded on Four distinct management processes


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1. Plan-This is the strategic portion of supply chain management. You need a strategy for
managing all the resources that go toward meeting customer demand for your product or service.
A big piece of planning is developing a set of metrics to monitor the supply chain so that it is
efficient, costs less and delivers high quality and value to customers.

2. Source-Choose the suppliers that will deliver the goods and services you need to create
your product or service. Develop a set of pricing, delivery and payment processes with suppliers
and create metrics for monitoring and improving the relationships. And put together processes for managing the inventory of goods and services you receive from suppliers, including receiving
shipments, verifying them, transferring them to your manufacturing facilities and authorizing
supplier payments.

3. Make-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. Deliver-This is the part that many insiders refer to as "logistics." Coordinate the receipt
of orders from customers, develop a network of warehouses, pick carriers to get products to
customers and set up an invoicing system to receive payments.

5. Return-The problem part of the supply chain. Create a network for receiving defective
and excess products back from customers and supporting customers who have problems
with delivered products. Each of the five major supply chain steps previously outlined composes
dozens of specific tasks, many of which have their own specific software. Perhaps the best
way to think about supply chain software is to separate it into software that helps you plan
and execute the supply chain steps themselves.