About Supply Chain Management (SCM)

Understanding

Supply chain management (SCM) was first established by Oliver & Weber in 1982 (cf.Oliver & Weber, 1982; lambert et al., 1998). SCM is a method, tool, or management approach. SCM is an integrated method with the foundation of the spirit of collaboration. From here it can be outlined that SCM is a process to integrate, coordinate and control the travel or movement of raw materials into finished products and can be up to the consumer. In this case information is also included in the process of cultivation.

All efforts are usually made in order that the process can be done effectively and efficiently to maximize the value that can be obtained by consumers and to achieve a sustainable advantage. In SCM there is the word "chain" and the word "supply". The chain can be analogous to the shape of a circle that does not break, while the supply is the inventory or stock of goods to be processed. So the supply chain is an interconnected circle to form the required items from the supplier.

Purpose

The purpose of supply chain management based on the above definition is:

1. Supply chain management concerning the consideration of the location of each facility that has an impact on activities and costs in order to produce the desired products from customers suppliers and factories to be stored in warehouses and distribution to the sales center.

2. Achieving the efficiency of activity and cost of the entire system, the total cost of the system from transportation to distribution of raw material inventory, work processes and finished goods.

SCM stream

Supply chain is also a network of companies that work together to create and deliver products into the hands of consumers or end users. Among them are suppliers, factories, distributors, stores, and support companies such as logistics service companies. There are 3 kinds of supply chain flow:

1. The flow of goods flowing from upstream to downstream. For example raw materials sent from suppliers to the factory.

2. The flow of money and the like that flows from downstream to upstream.

3. Flow of information that can occur from upstream to downstream or vice versa.

Coverage Area of ​​Supply Chain Management

1. Product Development Section

Has a range of activities including market research, designing new products, involving suppliers in the design of new products.

2. Procurement Section

Has coverage of activities such as choosing suppliers, evaluating supplier performance, purchasing raw materials and components, monitoring suplly risk, fostering and maintaining relationships with suppliers

3. Planning & Control Section

Has a range of activities including demand planning, demand forecasting, capacity planning, production planning and inventory

4. Operation / Production Section

Has a range of activities including production ksekusi, quality control

Component

Essential components in the process from Upstream to Lower Supply Chain Management (SCM), ie;

a) Upstream Supply Chain (Upstream Supply Chain)

This process involves the activities of a corporate or institutional organization with suppliers (manufacturers, sole agents, distributors, retailers, intermediaries, service providers). In this component the main activity is the procurement process of goods / services.

b) Internal Supply Chain (Internal Supply Chain)

The internal supply chain process involves the activities of all goods receiving processes to the warehouse, handover to customers or end users, in order to be used for internal supply chain process needs, whether for operational purposes, work programs, production, and inventory allocation. In this component, the main activity is the process of quality control, storage, and inventory control.

c) Downstream Supply Chain (C)

This process includes all activities involving the transport and distribution process of the allocation of supplies or goods available to the beneficiaries. In the downstream supply chain, the users, beneficiaries, or end customers. In the downstream supply chain, the main activities are the process of transportation, distribution, handover, and after-sales service.