In an enterprise resource planning (ERP) software environment, supply chain management is not a discipline unto itself. It is part of the business as a whole, with multiple dependencies between finance, manufacturing, purchasing and sales.

Supply Chain Management

Supply chain management is a cross-functional approach that includes managing the movement of raw materials into an organization, the internal processing of materials into finished goods, and the movement of finished goods out of the organization and toward the end consumer. As organizations strive to focus on core competencies and become more flexible, they reduce their ownership of raw materials sources and distribution channels.

According to the Council of Supply Chain Management Professionals (CSCMP), supply chain management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management. It also includes coordination and collaboration with channel partners, which may be suppliers, intermediaries, third-party service providers, or customers.