By using a concept called SCM (Supply chain management) many companies are extending internal enterprise resource planning (ERP) systems to their suppliers and customers.
SCM refers to the strategic management of supply chain operations with the goal of maximizing customer value and achieving long-term competitive advantage. It shows a determined effort on the part of supply chain companies to create and run supply networks as effectively and efficiently as they can.
The companies that make up the supply chain are "linked" via physical and information flows.
1) Physical energy flows
Physical fluxes include the transformation, transportation, and storage of products and materials. They are the supply chain's most obvious connection. However, the flow of information is also crucial.
2) Informational flows
Supply chain partners can coordinate long-term strategies and manage the daily movement of resources and commodities up and down the supply chain thanks to information flows.
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