Objectives of Supply Chain Management (SCM)

  1. To maximize overall value generated: The higher the supply chain profitability or surplus, the more successful is the supply chain. The supply chain profitability is the difference between the amount paid by the consumer to purchase the product and the cost incurred by the organization to produce and supply the product to the customer at right time.
  2. To look for Sources of Revenue and Cost: There is only one source of Revenue i.e. customer. Appropriate management of the flow of information, product or funds is a key to supply chain success.
  3. Replenishment of the Material or Product whenever required: Replenishment means restoration of a stock or supply to a former level or condition. Whenever necessary, management or marketer may think replenishing the material or product.
  4. Cost Quality Improvement: To achieve cost quality balance and optimization
  5. Shortening the time to Order: To reduce the time required for ordering and fulfilling the same
  6. Speedy delivery: To supply to the market with faster speed
  7. Delivery optimization: To meet consumer demand for guaranteed delivery of high quality and low cost with minimal lead time.
  8. Efficient supply chain: To improve the efficiency of the supply chain at all points.
  9. World-class performance: To achieve world-class performance
  10. More awareness: To achieve more awareness of supply chain dynamics and efficiency
  11. Demand Fulfilment: To fulfil customer demand through efficient resources
  12. Inventory Optimization: To optimise pre and post-production inventory levels
  13. Business Characteristics: Good understanding of business characteristics
  14. Flexibility: To provide flexible planning and control mechanism
  15. Transportation cost optimization: To reduce the transportation cost
  16. Efficacy: For Greater labour efficiency, equipment and space efficiency
  17. Better Distribution: To maximize the efficiency of the distribution side
  18. Cost Reduction: To reduce the system-wide cost of the company to satisfy service level requirement
  19. Better decision: Helps in better decision

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