What Is Supply Chain Management (SCM)? How Supply Chain Management Works?

Supply chain management is the management of the flow of goods and services and includes all processes that transform raw materials into final products. It improve a business's supply activities to gain a competitive advantage in the marketplace.

Supply Chain Management attempts to control or link the production, shipment, and distribution of a product. By managing the supply chain, companies are able to cut excess costs and deliver products to the consumer faster. Supply chain management is based on the idea that nearly every product that comes to market results from the efforts of various supply chain.

SCM can help to manage, The plan or strategy, The source (Raw materials or Services), Manufacturing, Delivery, and The Return.

Supplier relationship management (SRM) is the discipline of strategically planning for, and managing, all interactions with third party organizations that supply goods and/or services to an organization 

The objective of SRM is to maximize the value of those interactions. In practice, SRM entails creating closer, more collaborative relationships with key suppliers in order to uncover and realize new value and reduce risk of failure.

Supplier relationship management (SRM) systems provide Purchase governance, Contract management, and Supplier collaboration.

Solutions and Strategies for Better Relationships

1. Partnership should be based not only on financial transactions, but also on mutual trust and loyalty. 

2. Use supplier management software to keep track. 

3. Timely payments are crucial, making sure to pay them on time. Software solutions like AP automation can help you easily match payments with invoices and reduce errors.

4. Detailed agreements. If you are buying from a vendor on a regular basis, Supplier Relationship Agreements are a must. 

5. Think global, treats like local. Every city, state or country has different rules, laws and terminology. 

6. Get everyone onboard.