With corporate profits rolling downhill and dangers of financial disaster on the up, companies are putting greater emphasis on Supply Chain Management procurement methodology. There are various advantages to supply chain management, but smaller inventories and therefore, lower operational capitals are two of the primary ones. Supply chain management methodology can also carry along major disadvantages to companies, such as companies within the chain not being capable of offering the required supplies when and where they are necessary. The gains received from utilizing Supply Chain Management can be seen in leaner inventories and lower working capital, higher profits and productivity, better customer service, and a far greater competitive advantage. .
A company must get a product to its customers when, where, and how they want it, and in the quantities they wish to purchase this product, but still maintain the lowest price possible. Supply chain management is a procurement methodology which requires the cooperation of various organizations responsible "in various inputs "for a final product. Supply chain management presents to companies a new concept. It shows how various companies can unite to be a complete part of a large production-to-consumer process, from the moment of product "or service "conception to the very moment in which the final consumer purchases it. Companies that utilize supply chain management methodology bring products to consumers much faster that their competitors who do not use the method. These companies meet their promised delivery schedules much more often than those who do not utilize the system.
All partners in the supply chain must be actively involved and play a major role in aiding the chain to function properly and maintain its cohesion. All member companies of a supply chain must establish firm communication topologies between themselves and throughout their individual internal contributing processes.