ITPEC IP October 2023 Question 84

Sharing production, inventory and sales information across departments and companies to cut distribution inventory and satisfy customers — the purpose of SCM.

SCM (supply chain management) treats the whole flow from materials and production through distribution to the consumer as one chain. Suppliers, manufacturers, distributors and retailers share information on production, inventory and sales, so each stage plans against real demand. The chain as a whole carries less stock, runs out less often and delivers faster, which raises customer satisfaction.

Answer (b)

Why not others:

• •(a) — assessing the company's current strengths and weaknesses and choosing partners to complement the weaknesses is strategic alliance planning based on a SWOT-type analysis
• •(c) — clarifying where customer value arises across procurement, development, manufacturing, sales and service is value chain analysis
• •(d) — finding the most profitable combination of many products to make and sell is a product mix problem, solved with linear programming

Key rule: Information shared across companies from production to consumption means SCM; within one company it is ERP, with customers CRM.

Business Strategy Management · AI-written, may contain errors