By: FreightGuru

Supply Chain Management (SCM) involves the management of all business processes and activities that transform raw materials into final products, in a streamlined and cost-effective way.

It involves a mix of both planning and execution of the required processes which help in streamlining the flow of materials, information, and finances in production, planning, sourcing, storage, and inventory management.

Common terms

Supply chain attempts to link production, shipment, and distribution of products. It allows companies to save on costs and deliver products faster.

As a business owner, there are standard terms which you should be familiar with, such as:

  • Back-order – Mainly adopted during the high demand period, back-ordering is when you place an order from a supplier for a product that is out of stock and which your customers have already ordered.
  • Bill of lading- This is a shipping document which shows the type of goods, quality, and the destination address. It is a requirement whenever you transport goods from one point to another.
  • Blanket order- This is when a buyer arranges to buy a certain quantity of products over an agreed period without specifying the shipment dates.

Supply Chain Management Background

As a professional, it is good to know the roots of your industry. Supply chain management has existed for more than 100 years and has evolved from a labor-intensive and straightforward process to present-day engineering and management of complex global networks.

It has its roots in logistics and the need to improve the labor-intensive processing of handling materials.


Every product in the market is a result of the efforts of several organizations that form a supply chain. Although SCM is a very crucial segment in any economy, most companies have adopted it a value addition just recently.

List of sources


  • Luis Lopez

    Mr. Luis Lopez is a serial entrepreneur who sets the standards in logistics from South Florida to the world. Founder of one of the fastest-growing companies in the US, ranked by INC 5000 Magazine.

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