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What Is Supply Chain Management?

What Is Supply Chain Management?

So you want to be a supply chain manager? It’s an impressive-sounding role, but you might be asking, “what is supply chain management”? Well, it’s a lucrative, challenging, and enriching career. If you like efficiency and logistics, become a supply chain manager.

Follow our guide to understand the supply chain fundamentals, business models, and how to get your supply chain management certificate. We’ll share the best business programs to enroll in to kickstart your supply management career.

Defining supply chain management

Supply chain management streamlines the manufacturing process to reduce wasted time, money, and resources. Companies are harnessing the power of strategizing their supply chain to lower corporate finance. 

A supply chain includes the development process of raw materials to the final product, and a value chain is the activities needed to arrive at the final product. 

For example, milk suppliers are farmers who take the cow's raw material and the carton or bottle producers. In this particular supply chain process, the activities involved include: 

  • Milking. 

  • Bottling.

  • Shipping.

  • Selling.

Everyone involved in creating the final product, from inventory control to operations managers, is part of the supply chain. Global supply chains can be particularly costly and challenging to streamline.

An efficient supply chain management example reduces the product development process to its essential components, typically by centralizing all business functions. 

Vertical integration brings all functions and vertices into one process, creating the product through its distribution channel. Bringing everything under one company's control reduces external costs and improves efficiency. 

If we return to the milk carton example, the farmers might milk the cow and market the milk themselves to reduce outsourcing costs and increase their bottom line.

Customer demand influences supply chain management. Supply chain consulting plans production based on forecasting its success in the market. 

If the farmer predicts that they will sell lots of milk, they will adapt their supply chain to demand. Computer software streamlines supply chain processes. 

Enterprise resource planning involves integrating essential components of the product development process into a single system. It combines invoicing communications, big data,  reducing the time and costs of the business and individuals.

Why is supply chain management important?

Supply chain management is crucial for society to get essential materials, such as food, water, and clothing.  A poor supply chain will result in people suffering from a lack of necessities.

The bigger the business, the higher the overheads and the less efficiently the company runs. A good supply chain and logistics management can make or break a business.

Supply chain optimization will reduce costs for the business. Your business will gain a competitive advantage with efficient supply system processes that improve customer experiences. 

The less time and money put into the outcome of the product reduces the cost the customer has to pay. If a business outsources to many suppliers, they will have to charge more for the product to cover their overheads.

Businesses also need to focus on demand management. It is ineffective to produce too much or too little, and the former is wasteful while the latter leaves customers unsatisfied. An adequate supply chain considers how its products are demand-driven. 

Maintaining supplier relationships is also a crucial reason for an efficient supply chain. You want to keep your suppliers happy to maintain your business strategy. 

Managing timing is imperative — make sure products and supplies are in the right place at the right time. You don't want your supplier storing materials for you because you are not yet ready to use them.

Today's managers are also aware of social responsibility. Supply chain sustainability is essential to reduce waste and energy in the product lifecycle. 

A sustainable business process and management system will also give your business a better reputation among customers. With the rise of online shopping and next-day delivery, businesses feel increasingly pressured to find better supply chain and logistic systems. 

How is supply chain management different from logistics management? 

Logistics management is one part of supply chain management. Logistics and supply chain management often overlap.

The difference between chain management and logistics is that the logistics managers focus on the movement of goods (value chain). 

Logistics management coordinates the flow and storage of the product itself. In contrast, supply chain management looks after the different supply chains within the organization.

Logistic management tends to focus on the customer’s satisfaction. Supply chain management cares more about getting an advantage over competitors.

What does a supply chain manager do?

A supply chain manager is someone who coordinates supply chain activities. From resource planning to risk management, a supply chain manager is in charge of streamlining the business.

You will oversee the entire production process, such as sourcing materials, inventory management, and the finished product. Considering where the raw materials are sourced, transporting them, and warehouse management is part of a manager's responsibilities.

A supply chain manager might work with management software, SCM systems to optimize performance and use third-party logistics companies (3PL).

Duties involve looking at financial statements to make sure the supply chain design is effective. Supply chain planning can cut unnecessary costs for your business and chain partners. 

Six sigma is a methodology introduced by Motorola Inc. in the last century for quality control. To reduce supply chain risk, you might use such data-driven systems.

You will work with buyers to source the right products, finding cheaper or more local alternatives to expensive resources. You will negotiate contracts with suppliers to get the product as cheaply as possible. 

You will also consider post-production supply chains. You might bring marketing and sales in-house to reduce the cost of a middleman agency. However, the cost of housing your teams might not be worth the potential reduction in quality that you can find in specialist agencies. A supply chain manager will negotiate this balance.

A large company might have a global supply chain management team, which requires managing global supply chains. With different demographics, an SCM solution can become more complex to meet customer demand. Often, planning and execution will involve the use of a supply chain management software or system. 

Managers also need to stay up to date with new technologies and enterprise applications. The key is staying alert as to what your competitors are doing and innovating new technologies to improve your supply chain.

What skills does a supply chain manager need?

The rise of technology has improved supply chain efficiency greatly, particularly in communications. A supply chain manager requires strong analytical skills, logic, communication, and excellent time management. 

A systematic approach to business processes is, therefore, key to effective supply chain management. Supply chain strategy relies on understanding business management and customer relationships.

You need to have strong planning skills. The ability to visualize ahead and the forecast is essential for demand planning. Problem-solving and lateral thinking will help come up with chain supply solutions.

Innovation is also essential. It would help if you had an understanding of risk management. Knowing how much risk will pay off within the supply chain will improve your competitive advantage.

A good understanding of information systems and the ability to read electronic data are also helpful. You will essentially be working online, so computer skills are essential for electronic data interchange. 

Strong communication skills are essential both for customer relationship management and with suppliers. The ability to negotiate contracts to reduce costs and influence suppliers is also beneficial. 

Another vital skill is leadership, to be able to motivate a team of people. An efficient business relies on hard workers. Motivating others within your business will help to make the overall supply chain run smoothly. Suppliers will also want to work harder to keep up with your goals.

What qualifications does a supply chain manager need?

Supply chain professionals often have a business, logistics, or management degrees. While a degree program is not essential, many managers have one.

Alternatively, experience in operations management and business analytics are relevant qualifications. Try to gain experience in inventory management, demand planning, imports and exports, and project management.

Laborer internships or jobs, like warehouse experience, can be beneficial for the practicalities of supply chain management.

Get experience in as many industries as you can. While you might hope to be a supply chain manager in one specific industry, many companies work across fields. Also, you never know what direction your career might take you in. Understanding different industries well will open many doors for you.

You can also learn supply chain management with an online degree or supply chain management program. An online course provides professional certificates to add to your resume, and the learning experience is invaluable.

If you cannot find a supply chain-specific course, a logistics or business course will begin to build the stepping stones. Qualifications evidence will show you understand supply chain management and can utilize your skills. 

Is supply chain management a good career?

A career in supply chain management is lucrative, fulfilling, and challenging. Supply chain and logistics jobs are in abundance, and every retail, store, and goods production company has a supply chain network. 

There are job roles within supply chain management such as design and planning, procurement and supply management, and transportation manager. There is also supply chain quality management, warehouse management, distribution network planning, and inventory management.

Supply chain management touches every industry. Wherever you want to work, you can likely get a job within supply chain management. 

If you have the skills and the qualifications, a career within supply chain management has great potential. There are online supply chain management courses and programs to provide you with the necessary abilities.

The life of a supply chain manager is never dull. Each day will provide new problems, as different parts of the chain break down inevitably. If you like fresh challenges day after day, then a career in supply chain management might be for you.

Supply chain management can be a pressured job. As the role is to problem-solve issues in the chain, there are often deadlines to meet. The trick is to be able to think calmly in such situations. If you are good with stress and pressure, then you will be a good supply chain manager. 

There is tremendous career growth. Even an entry-level supply chain management job has a large amount of responsibility. You will quickly be able to prove yourself and progress. 

As consumer demand increases and next-day delivery dominates in this fast-paced world, supply chain management is growing. There is plenty of room to progress.

How much do supply logistics managers make? 

According to the Bureau of Labor, logicians earn a median annual pay of $76,270. T The job outlook could grow by 30% in 2030, much faster than average.

The job site Indeed suggests that a supply chain manager earns $84,764 on average a year. A career in supply chain management is lucrative and well-paid.

How to become a supply chain manager?

To become a supply chain manager, you need to learn supply chain management and logistics. Undergraduate and master’s degrees teach you the ins and outs of management SCM, system design, and business fundamentals. 

However, a college degree can be costly and lengthy, and admission requirements are often challenging. Taking an online supply chain management course is relatively affordable, less time-consuming, and open to everyone. 

Supply chain management courses provide you with an online certificate to add to your resume. Alternatively, try to get business experience in any industry. 

Critical thinking, management, and leadership skills are transferable to managing the supply chain. The more knowledgeable you are about the runnings of a business, the better supply chain manager you will be. 

To become a supply chain manager, you must first apply for entry-level jobs. A career in supply chain management is relatively easy with a certificate online from your training course, and you can learn on the job and work your way up to management within the industry.

While a master’s degree might jump-start your career to a higher position, working your way up from the bottom will give you a better experience of the entire process of supply management. You will also be earning from the get-go, without a mass of debts to repay.

Why should you take a supply chain management course?

A supply chain management course prepares students to work in supply chain management SCM and awards graduate certificates.

If you still struggle to understand “what is supply chain management,” individual SCM courses can help you. Online students learn a guide to supply chain management, information flow, and SCM software.

Courses for Success offer a Supply Chain Management Online Certificate Course.  There are no credit requirements, qualifications, or experience to enroll. An online graduate will learn the benefits of supply chain management, key terms, and strategic, tactical, and operational levels. 

A career in supply chain management might sound appealing, but you need the online certifications to prove your abilities. If you want to begin your career in supply chain management, why not start with a course?

Learn the fundamentals, increase your expertise and grow your confidence in the area.

Why Courses for Success? 

Courses for Success offers over 10,000 online courses, all of which aim to help you in your personal development and career progression. Not only that, but you can also study them anywhere and at any time, and take them at your own pace, too.

You don’t need career diplomas or specific experience to get started. From our coding courses and trading courses to design courses and developer courses, every course we offer will help boost your prospects, no matter who you are.

Beyond just the education itself, students will be issued a certificate online after completing each of the learning courses they do. Our online supply chain management courses are no exception and are recognized by industry leaders. You could make a name for yourself by signing up for a Courses for Success short course today.

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