Features of Supply Chain Management | Benefits, Functions of Supply Chain Management|

In this article, we are going to provide knowledge on features of supply chain management and the best functions, and benefits of supply chain management.


Supply chain management (SCM) needs the art of planning, organizing, and controlling the rhythmic flow of goods and services from the suppliers to the heart of the customers. There are many features of supply chain management (SCM) that we’re going to discuss. It is a complex and improving field. Any businesses of any size should at least manage their supply chains effectively. In the always fickle landscape of the market, supply chain management becomes your trusted partner. 

If you have the skills, it will whisper the secrets of agility and responsiveness in your ear loudly.  It is just like a magic potion as it empowers you to adapt swiftly to changes and ensures that your business always stays first in the competition. Your clients will admire your ability to easily satisfy their evolving needs and think that you have the powers of a sorcerer.

Features of Supply Chain Management (SCM)

  1. Inventory Management

So to let you know more about Inventory management, it is not a solitary practice. The main work of it is to work on collaboration and communication. It develops alliances with suppliers and partners by sharing demand forecasts and production plans. Because of this connection, the supply chain becomes a cohesive and synchronized entity, harmonizing the inventory customers’ needs.

Importance of Inventory Management in Supply chain management (SCM):

  • Reduce costs: By orchestrating the perfect inventory, businesses can vanish the financial burdens of excess or low stockpiles. With this strategic finesse, companies can surge goodbye to the heavy toll of overstocking and the costly stockpiles of understocking.
  • Improved Customer Service: With this fascinating selection, businesses can respond to the whispered desires of customers, making sure that their wishes are made flawlessly.  It will leave them spellbound by the exceptional service acquired. Your customers are important, so businesses can unlock the gateway to customer delight and bask in the radiant glow of satisfaction.

There are many more important things other than these.

Supply Chain Management

Some practices for Inventory Management:

  • Use a software system: You need a  good inventory management software system to help your business, i.e., to track inventory levels, place orders, and manage inventory costs.
  • Set safety stock levels: Safety stock is the inventory kept on hand to prevent stock-outs.
  • Use a reorder point system: It will help your businesses to know when to place orders with suppliers (at the right time).

2. Logistics

It acts as an important portion of supply chain management. It additionally looks at whether the goods are in the right place or not. Its practical performance is essential for optimizing operations, reducing costs, and satisfying customers. By adopting logistics principles, businesses can open the potential for evolution, profitability, and sustained success in today’s marketplace.

Significance of logistics in Supply chain management (SCM):

  • Freight: They look after the goods or products being transported correctly.
  • Distribution: The look-on process that displays that the goods are distributed from one location to another.
  • Warehousing: For making all these tasks easy they provide a warehouse (to store the goods) so that things can go smoothly. 
  • Order fulfillment: They look after the process of picking, packing, and shipping goods to customers.
  • Customer service: They help you to provide good interaction between a company and its customers.

After reading all these, you must understand the importance of logistics in Supply chain management (SCM).

Some practices for Inventory Management:

  • Efficient Transportation: This involves unlocking the mystery of transportation, and carefully selecting the thing that aligns perfectly with the importance of the goods being transported. Whether the things support with charm and finesse, striking celestial deals that grant favor upon the company.
  • Effective inventory management: Getting effective inventory management is the thing that you should keep in mind as you should have the right amount of inventory on hand to meet the customer demand, without overstocking or understocking.
  1. Procurement

Let us know about procurement, generally, its work is to attain the goods and services from the suppliers. It is not a solitary practice, but you can say a collaborative effort. It allows one to work with suppliers and partners to share demand forecasts and production strategies. This coordination enables you to ensure that the supply chain is a cohesive and synchronized entity and that inventory levels are in harmony with customer demand.

Procurement is an important part of supply chain management (SCM) because it will help you to:

  • Reduce Costs: You just need a skillful touch of work that can transform the work of cost, like elegant designers. These professionals craft inventory levels with precision. So you should not be worried about the burdensome storage and obsolescence sufferings. They will also help to bargain for budget-friendly work with the suppliers.
  • Increase efficiency: Behold, the efficiency who wields the strength to increase your business! Professionals will help to make your business with a less number of flaws.

Here you should have at least figured out the importance of Procurement. In supply chain management (SCM).

Some of the best practices for procurement, such as:

  • Develop a strategic sourcing plan: The plan here is that you can identify the key suppliers of each category and also with the best-desired terms and conditions of the relationship. 
  • Manage supplier relationships: In the empire of procurement (SCM), only the true brains understand the strength of forging unbreakable alliances. To do better, you should try the bonds of trust with suppliers. It will help you to create a great supply chain.
  1. Demand forecasting

It makes sure that the business has a clear understanding of the demand for the products. It is done by analyzing historical data, market trends, and customer behavior.

Methods for using demand forecasting:

  • Historical Analysis: About this method, it uses historical data to predict future demands.
  • Time series analysis: About this method, it uses statistics to analyze trends in historical data.
  • Cyclical analysis: This method analyzes demand over time to know about cyclical patterns.

Tips for effective demand forecasting:

  • Use multiple methods
  • Get input from the experts
  • Review your forecasts regularly
  • Be prepared to adjust your forecasts.
  1. Warehouse Management

In general terms, warehouse management is the process of watching over the receiving, storing and shipping of goods in a warehouse.

It includes things such as:

  • Receiving goods from suppliers
  • Storing goods safely
  • Picking and packing orders for shipping
  • Shipping orders to customers

Additionally, warehouse management also makes sure that the goods are available when they are needed. So warehouse management is so important in terms of the supply chain, and you can chain it as one of the most important components of SCM.

Benefits of effective warehouse management:

  • Reduced costs: If you are operating warehouse operations then some businesses can reduce costs associated with inventory, labor, and transportation.
  • Increased efficiency: There is a high chance that businesses can increase efficiency and productivity if you’re optimizing warehouse operations.

You must’ve understood the importance of supply chain management and what are the ideal features of supply chain management (SCM).

Benefits of Supply Chain Management

  1. Cost Reduction

In this world of many complicated business operations, the skill of Supply Chain Management (SCM) is always at the top as its cost is very user-friendly. SCM weaves a tapestry of savings, benefiting businesses in multifaceted ways.

Here is some info about a few companies that got benefitted due to cost reduction:

Walmart: With the help of cost reduction, Walmart has reduced over 50% of its inventory cost in the last few decades.

Dell: With the help of cost reduction, Dell has reduced its cost by $1 billion annually. 

Amazon: With the help of cost reduction, Amazon has reduced its cost by $6 billion annually.

Benefits of Supply Chain Management

A few things that show us loud the benefits of Supply Chain Management (SCM):

  • Achieve cost savings
  • Reduce waste
  • Improve efficiency
  • Increase productivity
  • Boost profits
  • Improve customer satisfaction
  • Gain a competitive edge
  1. Improved Efficiency

Supply Chain Management (SCM) emerges as a beacon of efficiency in today’s complex business landscape. It provides various advantages to get a clear scope of businesses in all sectors. So let’s discuss some of the key benefits of SCM that offer real value.

Here is some info about a few companies that got benefitted due to Improved Efficiency:

  • Walmart: With the help of Improved Efficiency, Walmart has reduced its delivery time from suppliers by 50%.
  • Dell: With the help of Improved Efficiency, Dell has reduced its fulfillment time by 75%.
  • Amazon: With the help of Improved Efficiency, Amazon has reduced its customer wait time by 45%. These are valuable examples of supply chain management.
  1. Customer Satisfaction

As we have mentioned many things regarding Supply Chain Management (SCM) you must have a clear vision about how it works and how to provide quality things.

Few other things that will help you to get a clear vision of SCM customer satisfaction:

  • Reduced Delivery Time: As the customers get their products in time, so there is no place for complaints. There are many companies following SCM and have successful businesses and some of them are Walmart, Dell, and Amazon.
  • Increased Product quality: When the product’s need is high the companies improve their inventory management and work with the suppliers to provide the customers with the best quality product. 
  • Reduced Costs: When companies reduce their costs, they pass the savings to the customers to decrease the price. 

The Function of Supply Chain Management (SCM)

  1. Planning

Here in supply chain management (SCM) making a good plan is important for ensuring that the right products are obtainable in the right amounts at the right time.

You should remember a few things in mind about planning in Supply Chain Management (SCM):

  • Demand planning: You should collect the demand for the products in the specific area.
  • It is giving us an idea about how much inventory the company needs and how much can the inventory carry.
  • Production planning: It is giving us an idea about how much shall the company needs to produce and when to produce it.
  • Transportation planning: It is giving us an idea about the transportation of products from suppliers to customers.
  • Warehouse planning: It tells us how can we store things the in warehouse properly.
  1. Sourcing

The art of sourcing is a captivating place where suppliers are carefully handpicked (chosen). Their prowess was evaluated, and partnerships developed. With detailed accuracy, negotiations unfurl, and agreements are shaped with finesse. Effective sourcing makes the best selection quality, cost efficiency, and sustainability align. It is destined to be successful.

Functions of Supply Chain Management

The best method for sourcing:

  • Identifying needs
  • Researching suppliers
  • Evaluating suppliers: 
  • Selecting suppliers
  • Managing suppliers
  1. Making

It is the process that uses raw materials to convert them into products for customers. It is one of the important things as it involves the outcome of the product.

Best methods for making:

  1. Delivering 

It is the process that delivers things from the company to the customer’s house.

Best methods for delivering:

  • Developing a strong understanding of customer expectations.
  • Optimizing the supply chain.
  • Investing in technology.
  • Empowering employees.
  1. Returning 

It is the service offered to the customer for receiving products or services back from customers.

Why customers return:

  • Customer dissatisfaction
  • Defective products
  • Unwanted gifts


Supply chain management (SCM) produces balanced methods for stock management, logistics, procurement, planning, sourcing, making, delivering, and returning.

It increases the success rate of your businesses to achieve cost savings, improve efficiency, and enhance customer satisfaction. It also helps to get a competitive place in today’s marketplace.

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Frequently Asked Questions

Q1. What is the role of supply chain management (SCM) in businesses?

Supply chain management can be achieved by effectively aiming at, organizing and controlling the goods and services from suppliers to customers.

Q2. How can supply chain management (SCM) help reduce costs?

By optimizing supply chain operations, businesses minimize their storage and costs.
SCM furthermore allows efficient procurement practices which include negotiation for budget-friendly supplies with reducing overall costs.

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