Components of SCM:

The three critical components of SCM are following:

• Supply management
• Demand management
• Logistics management

You would study about the supply and demand part of SCM in next unit and would discuss on logistics part of it now. As discussed previous that the logistics professionals play a key role in shaping the success of SCM as regards management of transportation, storage and warehousing. We sometimes do tend to avoid the role of logistics but the supply and demand chain may not be met without the integrated and close-knit support of the logistics.

Logistics management deals with handling, receiving movement, storage and delivery of material, services and finished product in an SCM system. Logistics is needed both at the straining and at the end of it .

Figure: Domain of Logistics

Logistics is the part of supply chain procedure that plans, implements and controls the efficient, effective flow and storage of goods, services and associated information from point of origin to point of consumption for the purpose of conforming to consumer needs. Role played by logistics is depicted in Figure.

Figure: Role of Logistics

An affective SCM system shall never be possible without the integration of logistics, as logistics is the foundation of SCM discipline and is responsible for its activities. Therefore, in order to maximize customer satisfaction and meeting firm's goal this is mandatory to ensure that effective storage facilities for goods & services are in place.