Importance of Supply Chain Management in Modern Business Supply chain management (SCM) as defined by Tom McGuffog means "maximizing added value and reducing total costs throughout the entire commercial process, focusing on the speed and certainty of response to the market." Due to globalization and ICT, SCM has become a tool with which companies can compete effectively both locally and on a global scale. SCM has become a necessity especially for the manufacturing industry when it comes to providing products at competitive costs and with superior quality compared to competitors. Here are some of the reasons why SCM has become important to today's manufacturing industry: - Competitive Advantage through Core Competencies Today's business climate has changed rapidly and has become more competitive than ever. Companies now not only need to operate at lower costs to compete, but they also need to develop their core competencies to stand out from the competition and stand out in the marketplace. To create competitive advantage, companies must divert their resources to focus on what they do best and outsource processes and activities that are not important to the company's overall goal. SCM allowed the company to rethink its entire business and restructure it so it could focus on its core competencies and outsource processes that fall outside of the company's core competencies. Due to the current competitive market, it is the only way for a company to survive. The SCM application strategy will not only impact the market positioning, but also the strategic decision on choosing the right partners, resources and manpower. Focusing on core competencies will also allow the company to create niches and specialization of key areas. As stated in the Blue Ocean Strategy outlined by Chan Kim, to create a niche for competitive advantage, companies must look at the big picture of the entire process and understand what process can be reduced, eliminated, augmented and created. an example cited by Chan Kim, Japanese automotive industries capitalize on their resources to build small, efficient cars. Japanese automotive industries gain a competitive advantage by using the supply chain to maximize their core competencies and position themselves in a niche market. The strategy works and now the Toyota Motor Corporation, a Japanese company, is considered the number one car manufacturer in the world, beating the American Ford and General Motors..