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How does a supply chain management system track products data and money?

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Supply chain management (SCM) systems track the flow of products, data, and money by integrating the activities of all organizations involved in a product's lifecycle, from raw material suppliers to final retailers.1

Tracking Products and Data

SCM systems utilize transaction processing to monitor goods as they move through the supply chain. When a product is sold at a retail level, scanners or cash registers capture the sale, which automatically triggers restocking orders to suppliers. These systems maintain visibility by allowing suppliers to access a retailer's inventory database over the Web, ensuring efficient, just-in-time delivery.21

Tracking Money and Control

To ensure financial integrity, logistics control systems track goods to prevent loss or theft. When items leave the system, they must be exchanged for proper documentation or payment. In larger organizations, these processes are often handled by enterprise resource planning (ERP) systems, which automatically update financial accounts, initiate billing, and coordinate delivery logistics as part of the broader value chain.21