Supply Chain management is associated with transformation and flow of services as well as goods from raw materials to customers and SCM includes all kinds of facilites , activities and functions during process. SCM is an integrative approach and all types of stages involved in fulfulling customer request either directly or indirectly.
Advantages of SCM:
- SCM lowers inventories as well as costs.
- It improves flexibility of supply chain.
- Higher revenues can be generated with supply chain management.
- Profitability and performance of entire process increases.
- SCM focus on core compentency.
- Supply chain management improves the efficiency of the process.
- Shorter lead time and greater customer loyalty.
- Higher productivity and greater agility.
- Better inventory control by saving labor and procurement cost.
- Better control over suppliers can be achieved using supply chain management.
Disadvantages of SCM:
- Heavy investment of resources, time and money is required during implement and initial phase of supply chain.
- Choosing the correct suppliers and integrating supply chain, sometimes become more difficult.
- Sometimes loss of control.
- It may also impact in house workforce.
- Susceptibility to road conditions or weather conditions.
- It may unsuitable for heavy loads.
- It may also unsuitable for long distance.
Also find more points on advantags and Disadvantages of Supply Chain management to know more about it.