Supply chain teams simply handle procedures that take place outside traditional transaction and logistical systems using supply chain service management, also known as SCSM, or supply chain as a service (SCAAS). Any end-to-end supply chain procedure that isn't fully contained within a single transaction system is included in this.
SCSM is a subset of enterprise service management (ems), which evolved from ITSM.
While some industry insiders may jokingly claim that the supply chain is synonymous with chaos, it's critical to understand that this kind of unstructured, ad hoc issue solving isn't only inconvenient; it also has serious implications for your company's operations in the supply chain:
The premise that supply chain operations should be handled as a service is central to SCSM. SCSM is used to manage a process as a service if it expands beyond a single transaction system. An example SCSM situation may entail dealing with a late supply. A transportation management system ("TMS") would initiate a SCSM incident, pulling all necessary information from the TMS system and initiating a process. In this example, the event would notify the logistics and supply chain team, which would be able to filter and prioritize its incident queue depending on priority. The customer support representatives and the carrier representatives would be available.
Why is SCSM required?
According to a PWC survey, they have an optimal response to supply chain disruptions that allows them to manage issues in a dynamic, flexible, proactive, and collaborative manner. The remaining 59% spend their days in reactive mode, using ad hoc tactics that result in continual firefighting of the same issues. As a result of supply chain interruptions in fulfillment, inventory, business logistics, technology, or other aspects of supply chain performance, more than 60% of organizations report a 3% or higher reduction in key performance metrics.
SCSM guarantees dependable, repeatable, and efficient supply chain operations by providing supply chain processes as a service. SCSM eliminates the need for firefighting, keeps supply chain employees from becoming exhausted, and makes consumers happier.
What characterizes a good SCSM ?
To guarantee that daily activities go as swiftly and effectively as possible, good SCSM adds structure, accountability, and openness. A dynamic and adaptable strategy is embraced by good supply chain management, enabling businesses to proactively handle supply chain issues before they have an impact on consumer satisfaction. It also makes it possible to leverage supply chain efficiency over the long term in a consistent and significant way. An improved SM process would be able to recognize problems as they happen, assign accountability to the person in charge of solving them, and work together to do so. Let's take the scenario where there is a significant part shortage in your manufacturing supply chain. Scsm enables your team to identify a shortage right away and alert the rest of the team.
Because SCSM is a novel idea for many people, let's start by defining what excellent SCSM is NOT:
Anyone who works with supply chains will likely be all too familiar with this style of management. Sadly, the effects on the supply chain are also negative.
- inefficient procedures;
- Ineffective resourcing;
- Ongoing interruptions;
- Dissatisfied staff members and clients
Numerous supply teams spend hundreds of hours building n-tier supply chain visibility only to discover that the effort was ineffective in the absence of a more adaptable and agile operation.
The supply chain for your business is ultimately affected by a mix of extended hours and temporary solutions. This approach to patching up the business system is equivalent to applying scotch tape to a leaky pipe. Sure, it could last for a while, but sooner or later there will undoubtedly be a problem, as we all know.
Chaos prevails in supply chain management.
After defining what SCSM is not, let's examine what effective supply chain service management entails:
- Complete transparency is ensured by a single source of truth.
- A cloud-based software system for prioritizing and queuing incident request submissions
- Clear ownership to ensure responsibility.
- SLAs that are well stated and do not require firefighting
- Continuous interaction with supply chain partners
- Meetings that employ real-time dashboards and don't require preparation
- Active root cause analysis to permanently eliminate recurring problems
Things appear significantly different with SCSM since supply chain processes are controlled as a service:
- All supply chain operations are standardized and coordinated.
- Problem-solving processes are simplified, and unnecessary effort is removed.
- Supply chain planning issues are promptly fixed before they affect customers.
- Software centralizes data, allowing for long-term optimization.
What Is the Purpose of Service Supply Chain Management and How Does It Operate?
Any supply chain process may be managed using SCSM as a service. Any procedure in the end-to-end supply chain's plan, source, make, or delivery falls under this category. Popular procedures that SCSM manages include:
In order to support Crisis Management, War Rooms (virtual and physical), and other supply chain processes where data centralization and clear accountability are priorities, SCSM can be applied within functions (such as Planning, Production, Logistics, Procurement, and Customer Service) as well as across functions.
SCSM may be used to support both specific use cases and more extensive, multi-level supply chain projects. In these circumstances, SCSM aggregates many supply chain operations that have a similar goal and administers them all as a service.
Supply chain visibility is becoming more popular, but astute business leaders understand how crucial it is to make that visibility useful. Real-time action and visibility combined with service management make up an ideal digital strategy.
Despite the terminology, supply chain visibility shouldn't only be looked at. It needs to be utilized to carry out actions that assist you in continually optimizing effectively, cutting expenses associated with inventory safety stock, transportation, and activities, and most significantly, delivering the best experience possible for each and every consumer.