What does supply chain mean

Supply Chain Management (SCM)

1. Term: Supply chain management refers to the establishment and administration of integrated logistics chains (material and information flows) over the entire value creation process, starting from the extraction of raw materials through the processing stages to the end consumer. Supply chain management thus describes the active design of all processes in order to supply customers or markets economically with products, goods and services. In contrast to the term logistics, supply chain management includes not only physical activities but also the accompanying order processing and cash flow processes. Thanks to the paperless exchange of planning-relevant data, procurement, production and sales plans can be coordinated at the various levels, and companies can react immediately to disruptions with plan changes.

2. Aims: Optimization of the performance and services of the supply chain in relation to the costs used.

3. Requirements: a) Supply chain management primarily requires the integration of information processing between the partners in the supply chain. To this end, suitable interfaces or services for the exchange of information between the stages of the supply chain must be created.

b) The need for a company to inform its suppliers and customers about disruptions in its own logistics chain requires a high degree of trust between the partners in the supply chain.