What Is Supply Chain Management? This Is What It Does For Your Business!

The Supply Chain Management (SCM) world is interconnected with so many other individuals, organizations, businesses, and more. It is common for people to not realize how important SCM is to all industries and businesses because almost all businesses use SCM without realizing it or to better themselves.  

When Did SCM Start?

Supply Chain Management really started to take off In the 1940s and 50s. Originally,  SCM started off very labor intensive and focused on the logistics of material handling and overall improving the warehouse. This was the start of how to make the most out of your warehouse space and storage issues. This is also when the notion of pallet storage came to life.

As time went on, slowly supply chain advanced into more than warehouse logistics and material handling. This is still an integral part of the process, but much more has been added. From transportation and shipping concerns to what we worry about now, the digital era.

What Exactly Is Supply Chain Management?

SCM is the active management of all supply chain activities to maximize customer values and relationships and achieve a competitive advantage for that company. Supply Chain looks at the processes it takes to get the goods from each location to their final destination: the consumer. SCM covers everything from product development to sourcing, from production to logistics.

This video explains SCM in the simplest form and how it works each and every day!

An example of this at work: You buy a brand new couch online. Now, before this couch ever reaches your front steps, it has to be built first. The original company buys the materials and sends it to a manufacturer to make it for less money. The manufacturer builds the couch and sends it to the store you bought from, or in this case, the online distributor.  At which point, you are able to spend your money on getting a new couch. At the end, you are the happy consumer who recieved your couch in the framed timeline and were able to score an awesome deal!

How Does It Helps Your Business?

A powerful SCM system in your business will ultimately bring you above the competition and increase your revenues. There are many benefits to having an effective supply chain system in your business.

  • It will increase efficiency which ultimately will help your costs in the end. A great example of this is in warehouses. A warehouse holds all of the goods that are needed for shipment. Check out our blog on, “Warehouse Logistics- It’s More Than Just Storage!”
  • If you have an effective and efficient SCM it will increase your business because goods will be getting to consumers faster and faster.
  • A great SCM will help you build relationships with other organizations and manufacturers who will be helping you along the way.  
  • This will increase your levels of communication with others. It will make employees and the employer communicate more to make sure everyone is on the same page.

If you are new to the SCM world, it can be overwhelming! We found this glossary of SCM talk, which is explained to you in great detail.

Overall, the SCM world is one that brings all businesses together! When you grab something off the shelf or order it online, you often don’t know about the processes behind all of this. This is because you are the consumer, the person who the SCM and business professionals are trying to please.

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Midwest Storage Solutions, Inc., has been helping warehouses with their space, time, logistics, and SCM since 1997. We understand that #StorageMatters, and at the end of the day, the wrong storage makes a world of difference. For more information on industrial or other types of storage, call us today!

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