Friday, 9 August 2013

SCM - Supply Chain Management

Supply Chain Management is the set of methods and techniques through which the tracking and coordination of material, information, and financial flows are made on the provider-organization-consumer path together with the information system who supports it.

ERP systems assures data transfer both within the organization and in its external environment, starting with key suppliers and ending with the customers network.

SCM optimizes three categories of flows : production flows (movement of goods from a supplier to a consumer as a result of the latter's request), information flows (oders sent by the client and updates regarding the delivery), and financial flows (credit terms, payment methods, and payment schedule).

Considering the application features, these include two types of software packages:
  • Planning applications usually using complex algorithms to determine the optimal satisfaction of an order. In this category are also the software applications who use algorithms for the breakdown of each product ordered into a tree structure components, determining the necessary products.
  • Execution applications that track the physical state of the products and materials, as well as economic and financial information regarding sales and supply activities. However, Zimplu team enourages in using online applications which is the tendancy of the last years. In this case, Internet technologies being developed are:
    • eProcurement systems that provide virtual support for most of the supply activities . These systems include an online auction component which allows a real time balanced supply-demand compatibility with the legislation in force.
    • eCommerce systems where customers benefit from a range of sales and support services such as online payment facilities
Implementing a SCM system ensures the consolidation of information necessary to support decision making for purchasing, which generates a number of benefits for the organization, among them:
  • Reduces material costs by identifying providers with the best quality vs price ratio;
  • Simplifying procedures for negotiating and contracting;
  • Lower supply personnel costs;
  • Reducing inventory levels, eliminate the phenomena of lack of stock or overstocks.
SCM tools are using network technology to connect the organization's  customers and suppliers to generate real time information on the evolution parameters of production and distribution processes. This way the company is able to effectively manage their business activities.