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Supply chain management is an essential process that helps to maintain a balance between the production, sales, delivery and cost-effectiveness. 

To redefine ‘what is supply chain management’ in simple words, it is a process that helps streamline the steps, from obtaining raw material and using it for producing goods, to sales. It also helps in analysing the performance of your products or service. 

Supply chain management - the importance

Some of the importance of supply chain management is discussed below – 

1. With proper supply chain management, you get to decrease the cost associated with storing the necessary raw materials. 
2. You can understand and predict changing sales pattern and bring in customer satisfaction. 
3. It helps in regulating working capital and improves the cash flow of your business.  
4. Helps in figuring out gaps in the production system and aids in addressing them appropriately. 

Now that you know the importance of supply chain management and the concept of it, discussed below are some components of the same. 

1. Sourcing 
2. Information gathering
3. Planning 
4. Inventory management
5. Production
6. Customer satisfaction

Besides, other components include the location of your business or sales, target audience, logistics, etc. 

Additionally, if you wonder ‘how to improve supply chain management’, you can follow some simple steps that include streamlining every area of the manufacturing process, focusing on the quality of production, etc. 

Other ways include investing in the resources required, maintain supply chain finance, audit the supply chain management regularly based on reports, etc.