Supply Chain Management - SCM

AAA

DEFINITION of 'Supply Chain Management - SCM'

Supply chain management is the streamlining of a business' supply-side activities to maximize customer value and to gain a competitive advantage in the marketplace. Supply chain management (SCM) represents an effort by suppliers to develop and implement supply chains that are as efficient and economical as possible. Supply chains cover everything from production, to product development, to the information systems needed to direct these undertakings.

INVESTOPEDIA EXPLAINS 'Supply Chain Management - SCM'

Typically, SCM will attempt to centrally control or link the production, shipment and distribution of a product. By managing the supply chain, companies are able to cut excess fat and provide products faster. This is done by keeping tighter control of internal inventories, internal production, distribution, sales and the inventories of the company's product purchasers.
SCM is based on the idea that nearly every product that comes to market results from the efforts of various organizations called the supply chain. Although these supply chains have existed for ages, until recently most companies have paid only scant attention to them.

RELATED TERMS
  1. W.P. Carey School of Business

    The school of business at Arizona State University. It enrolls ...
  2. Organizational Structure

    Explicit and implicit institutional rules and policies designed ...
  3. Just In Time - JIT

    An inventory strategy companies employ to increase efficiency ...
  4. Inventory

    The raw materials, work-in-process goods and completely finished ...
  5. Consignment

    An arrangement whereby goods are left in the possession of another ...
  6. Supply Chain

    The network created amongst different companies producing, handling ...
RELATED FAQS
  1. What is the difference between supply chain management and value chain management ...

    The primary difference between supply chain management and value chain management is their view on the flow of production. ... Read Full Answer >>
  2. When has the United States run its largest trade deficits?

    In macroeconomics, balance of trade is one of the leading economic metrics that determines the trading relationship of a ... Read Full Answer >>
  3. What is the utility function and how is it calculated?

    In economics, utility function is an important concept that measures preferences over a set of goods and services. Utility ... Read Full Answer >>
  4. Which is more important to a nation's economy, the balance of trade or the balance ...

    There is no question the composition of a country's balance of payments is more important than its balance of trade. This ... Read Full Answer >>
  5. What is the difference between cost and freight (CFR) and cost, insurance and freight ...

    The difference between cost and freight (CFR) and cost, insurance and freight (CIF) is essentially the requirement under ... Read Full Answer >>
  6. What is the difference between Cost and Freight (CFR) and Free on Board (FOB)?

    The difference between cost and freight (CFR) and free on board (FOB) lies in who has responsibility for various shipping ... Read Full Answer >>
Related Articles
  1. Insurance

    Working Capital Works

    A company's efficiency, financial strength and cash-flow health show in its management of working capital.
  2. Fundamental Analysis

    Measuring Company Efficiency

    Three useful indicators for measuring a retail company's efficiency are its inventory turnaround times, its receivables and its collection period.
  3. Investing Basics

    Economic Indicators That Do-It-Yourself Investors Should Know

    Understanding these investing tools will put the market in your hands.
  4. Active Trading Fundamentals

    Operational Risk: A Must-Know For Investors

    This type of risk is often overlooked, but it can mean the downfall of a company - and its investors.
  5. Retirement

    The Evolution Of Enterprise Risk Management

    This growing sector can tell you a lot about the companies you are investing in.
  6. Economics

    The True Unemployment Rate: U6 Vs. U3

    Learn how to distinguish between the U-3 and U-6 unemployment rates, and explore which rate provides a truer picture of unemployment.
  7. Economics

    An America with Donald Trump as President

    Take a closer look at some of policy proposals from Republican presidential candidate Donald Trump, and what a future with President Trump might look like.
  8. Stock Analysis

    The Top Performing Airlines Right Now

    Learn about the airline industry and its top-performing companies. Understand these top-emerging airlines and why they have taken more market share.
  9. Economics

    What Is a Quota?

    In business, quota usually refers to the sales target for a salesperson or a sales team.
  10. Economics

    What Does Infrastructure Mean?

    Examples of infrastructure include mass transit, communication, sewage, water and electric systems, plus roads, bridges and tunnels.

You May Also Like

Hot Definitions
  1. Dog And Pony Show

    A colloquial term that generally refers to a presentation or seminar to market new products or services to potential buyers.
  2. Topless Meeting

    A meeting in which participants are not allowed to use laptops. A topless meeting organizer can also ban the use of smartphones, ...
  3. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  4. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  5. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  6. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!