Supply Chain Management (SCM), defined by Tom McGuffog, "Maximizing value added and total cost cutting focusing on speed and market security throughout the trading process." Because of globalization and ICT, SCM has become a tool for companies to compete effectively, both locally and globally. SCM is particularly important for the manufacturing industry when products are delivered at competitive prices and at a higher level to their competitors. Here are some reasons why SCM plays an important role in today's manufacturing industry: –
Competitive competition through core competencies
Today's business environment has changed rapidly and has become more and more competitive in nature. Businesses need to work not only at lower costs to compete, but also to develop their core business to differentiate themselves from competitors and emerge on the market. In creating competitiveness, companies have to distribute their resources to focus on what they do best and outsource the process and task that is not important to the company's overall goal. SCM enabled the company to reflect on their full operation and reorganize to be able to focus on their core competencies and outsource processes that are not part of the company's core competencies. The current competitive market is the only way for the company to survive. SCM's strategy for strategy not only affects market positioning, but also strategic decision-making on the selection of relevant partners, resources and staff. By focusing on core competencies, the company will also be able to design and specialize in the main areas. As stated by the Blue Ocean Strategy outlined by Chan Kim, in order to gain a competitive advantage, companies need to look at the whole process with a great picture and assess which process can be reduced, eradicated, elevated and created  As an example of Chan Kim, the Japanese automotive industry exploits its resources to build small and efficient machines. The Japanese automotive industry gains a competitive advantage by exploiting its supply chain to maximize its core competencies and position a market gap. The strategy is working, and now Toyota Motor Corporation, a Japanese company, one of the largest automakers in the United States, Ford and the United States.
is not only the benefit of productivity itself, but also the value advantage. In Martin Christopher's book, "Logistics and Supply Chain Management: Costs Reduction Strategies and Improvement of Service" concludes that "the advantage of productivity results in a lower cost profile and an evaluation advantage for the product or" competitive offers. "Maximizing value added and cost-cutting can bring more innovation to the product and process, mass production offers productivity but massive customization can be achieved through efficient supply chain management. Flexible manufacturing and personalized customization are beneficial to customers by mass customization. Product life cycles can also be improved by the effective use of SCM, and the value advantage will also change the norms of standard bids that are "of the same size." Throughout SCM, the industry's recommendation to consumers apply to a variety of products that are part of different market segments and customer preferences.
For example, Toyota's production system has been practicing at Toyota, evaluating its supply chain, and determining what value-added activities and what is not added value activities. Activities with no added value are classified as "Muda" or waste and should therefore be eliminated. Such non-added value activities are overproduction, waiting, unnecessary delivery, processing, unnecessary inventory, unnecessary movement, mistakes, and unused employee creativity. The steps to eliminate waste are implemented through Kaizen, Kanban, Just-in-time and push-pull production to meet actual needs. The Toyota Production System revolutionizes Supply Chain Management to become a shrinking supply chain that is more agile and flexible to meet end-user needs.
Source by sbobet