Supply chain Management (SCM) is an end to end process in merchandise planning and movement, from planning the inventory (preparing the purchase order) to point of reaching the merchandise to the customers. SCM is an integrated process where every activity is interlinked with the system for information throughout the cycle time of each step of the process so that timely action can be taken.

    The supply chain or distribution logistics encompasses all the activities and exchanges involved in extracting, processing, manufacturing and distributing goods and services from raw materials through to the end consumer. It also requires the retailers to take a holistic view of these activities and adopt innovative approaches to meet customer needs with great efficiency.

     In the traditional distribution network, retailers sell merchandise which the manufacturer conceive and wholesalers supply. In this linear set up it was a left to right progression, wherein the customer stood passively, at the receiving end of the chain. But today, the consumer is more demanding and choosy because he is being wooed by many organized retailers who are putting all efforts to enhance customer value through establishing sophisticated logistics management systems.

            The above figure indicates the various components in the traditional supply chain channel and the manufacturer, wholesaler and retailer have to build up a chain of facilitating services so as to ensure that the right product reaches the final customer. Here the manufacturer was dependent on the intermediaries to offer qualitative service throughout the chain, maintain low cost and then deliver goods and services to customers.