This article is an attempt to understand supply chain management (SCM) in Indian companies. It probes into broader trend, which explains the status of SCM in India, suggests what are the requirements for the implementation of a successful supply chain?

Supply Chain Management (SCM) has emerged as one of the most powerful business improvement tools. Suppliers, manufacturers, distributors, retailers and a host of service organizations have discovered that they must either transform their operations and tactics or be beaten by competition from more aggressive supply networks.

Worldwide, organizations have formed networks for sourcing raw materials, manufacturing products or creating services, storing and distributing the goods and ultimately delivering the products and services to customers and consumers. The objectives of these networks are to encourage product and service innovation with a view to satisfy the final customer. These organizations see the value of integrating systems and supply chain operations across the full range of component function. Business strategies are getting intrinsically connected with supply chain and information strategies. Leaders are using advanced supply chain and data systems to harmonize organizational efforts and achieve very ambitious long-term strategic goals. Leading Indian companies are forging future supply and demand networks that create an integrated delivery system, appearing seamless to the final consumer. Indian companies are moving towards an integrated system of supply, linked directly to the current demands in the chosen markets, so that efficiency savings are accrued and shared across the network.

SCM influences about 64% of all costs in a manufacturing company. American companies had spent 10 % of their GDP on Supply Chain-related activities in 1997. In Europe supply chain-related costs hover around 55-65% of total turnover. In India such costs would be around 70-80% of turnover. From these figures one can get a fair idea of the potential for savings and at the same time improving competitiveness, if supply chain-related activities are organized and managed strategically while improving process efficiency and enhancing effectiveness of the systems.

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