Supply chain management used to be something that small and medium-sized businesses had to manage more or less on their own. This could be a true challenge since some businesses lack the personnel that can handle the coordination and integration of materials, finances, and information so that they form a smooth flow from suppliers to consumers, with stops at manufacturers, wholesalers, or retailers along the way. Depending on the point in the chain where a particular business fell, SCM could be quite a daunting task. The result was often that very small businesses felt they lacked resources to fully tackle the problem, leading to a system in which managers might always be “putting out fires.”
The advent of managed services has changed the SCM landscape, however. Now, there are ASP (application service providers) which operate over the web to assist businesses with the management and control of their supply chains. These web-based service providers are very flexible and can provide only certain segments of SCM or can provide a complete solution for subscribing businesses.
Varieties of SCM
There are three main kinds of SCM. One focuses on the flow of raw materials and component pieces needed for the end product, while another involves the information required for business processes resulting in the end product. The third major kind of SCM involves the flow of finances, including payment schedules that make production possible.
SCM software addresses these needs in terms of both planning and execution and can be implemented as part of an overall managed services model for IT solutions.