5 Functions of Supply Chain Management

Part of Supply Chain Management for Dummies Cheat Sheet

Supply chain management involves five main functions: aligning flows, integrating functions, coordinating processes, designing complex systems, and managing resources.

  • Aligning flows: As money, materials, and information are passed between customers and suppliers, supply chain management keeps them flowing up and down a supply chain.
  • Integrating functions: Supply chain management connects the activities of logistics, purchasing, and operations to ensure that they focus on goals that benefit overall performance.
  • Coordinating processes: Supply chain management increases profitability by aligning the processes used to plan, source, make, deliver, and (when necessary) return a company’s products and services.
  • Designing complex systems: Simulation tools can predict how a supply chain will behave and show how small changes can cause major disruptions in the flow of materials.
  • Managing resources: Supply chain managers are responsible for using people, processes, and technology to meet the needs of customers.