Supply chain management is defined as a combination of artistic knowledge and science that companies adopt in a bid to improve the acquisition of raw components crucial to product innovation and service delivery to the customers. There are five main components of Supply chain management. They are as follows;


It is the core part of SCM and is referred to as the strategic portion. Every company needs a strategy on which it can manage its resources and meet customer requirements in regard to products and services. The plan involves development of metrics that monitor the efficiency of the supply chain. This should be able to cut on the coasts and increase product value to customers (Gattorna, 2009, p 98).


This involves identifying the supplier or company that will be given the responsibility of supplying goods and certain services to the company. Supply chain managers must come up with a pricing strategy that is able to improve the relationship between the customer and company. This will be based on a metric  that monitors and improve matters related the customer ihnteractions.Af5ter this is achieved the managers are required to set procedure for managing the products and services .This will include reception and verification of shipments and transfers of the shipments to manufacturers(Gattorna,2009,p 138).


This is the step that covers manufacturing. Supply Chain manager’s schedule the actions that are important to production i.e. testing, packaging and delivery preparation. This step is the most metric intensive. This is where companies are able to measure the quality of their products and workers’’ productivity (Gattorna, 2009, p 164).


This is the step that the supply chain managers refer to as logistics. In this step, the company prepares orders and designs warehousing facilities and also selects carriers that are charged with the responsibility of sending the products to the customers. The setting up of an invoicing system is the last part in this step (Gattorna, 2009, p 208).


This is the most problematic part of supply in many companies. The supply chain managers have to design ways that are flexible and accommodating which should handle all defective products from the customers. Receiving of surplus products from the customers is also incorporated in this step. The goal of supply chain management software is to increase efficiency in service delivery. The software connects the company’s supply chain with the supply chains of other customers under a vast network that reduces the costs of operations for the companies. Most companies share some information with their supply partners. Such action is made easier by this software (Gattorna, 2009, p 308).

Supply chain management relies on ERP for integration of information that is expected to flow fast within the departments. Such SCM applications require the support of a stable network that guarantees reliability and effectiveness. This is where ERP comes in due to its remarkable stability. It is important to note that a majority of ERP vendors have SCM modules. This means that by undertaking ERP the company will be solving two problems at the same time (Gattorna, 2009, p 520).