Introduction to Supply Chain

What Is Supply Chain Management?

Supply chain management (SCM) is the field which manages the flow of resources through all steps of a manufacturing cycle. SCM can be applied to any company which executes projects, manufactures products or services. Those operations need a supply chain in order to ensure a continuous supply of resources. This is where supply chain management is essential.

SCM is extremely crucial in the administration of business sector because it influences the other important business fields like operations management, controlling inventory, and quality control. What matters and makes SCM crucial is the fact that it also can be significant competitive advantage for companies.

The primary objective of management of supply chains is to get the best use of the resources that are part of the supply chain to make it the most efficient as is possible. Management of people is essential and supply chains require management too. No matter if the supply is products or service, they need to be recorded and managed all the way from beginning to end by a deliberate process of supervision. For a better understanding of SCM Let’s first identify what supply chains are.

What Is a Supply Chain?

Supply chain links a business to the manufacturers of raw material. The supply chain is also utilized to supply a product to clients. The more efficient the management of supply chains will be, the better competitive edge the business has.

Supply chains require the delivery of the raw materials, goods or services from their initial condition to the end user and to improve the customer relationship. The largest companies and projects typically include several supply chains that is referred to as the supply network. The presence of supply chain management and managing supply chain is essential for delivering value to your customers and increasing the effectiveness of your supply chain.

Supply Chain Management Process

The process of supply chain management is crucial to a successful control of supply chains. Companies use it to ensure that their supply chains are more efficient and economical as they can and provide customers with satisfaction and an edge in the market. There are five stages that are required to supply chain. The steps are listed as follows.

1. Planning

For the purpose of controlling the production process and inventories, businesses must be able to plan their production processes in order in order to balance demand and supply. This is referred to informally as the supply chain plan. It prevents the overspending of storage space, or not having the essential raw materials required for manufacturing, which can delay the arrival of the product.

2. Sourcing

The next step is to find companies that can provide you with items and services needed when you require these items. It is through sourcing that you will procure the supplies you require when you need to and satisfy the needs of your customers.

3. Making

This is where the products you purchased will be transformed into products which meet the needs of your clients’ demands. It is here that assembling the components, testing them and packaging takes place. Customer feedback is essential for delivering value to customers.

4. Delivering

Making sure that your final product is delivered to your customer is the second stage in the SCM procedure. If you’re not able deliver what you create to the customers, all of the previously completed steps won’t matter. It is why delivering your product is crucial for supply chain efficiency.

5. Returning

Returning, or returning or reverse the logistics is an aspect of what’s described as the post-delivery support procedure. It’s important to establish the right channels for returning to avoid tarnishing your brand. A company could then collect these poor quality, deficient or expired products and send the materials to their supplier.

Parts of a Supply Chain Model

For the best results from SCM involves looking at the larger perspective in terms of the company’s management. It is no longer enough to manage the individual business function sufficient. Integration of all the activities associated with the supply chain are essential and that includes integration with various departments like marketing and purchasing.

Supply chain management requires coordination and integration between suppliers and buyers. It also requires collaborative product development, the use of common system and sharing of information. These are the key components of any SCM model or system.

• Customer Relations ManagementThere is a regulated method of interacting with clients of the company, both current and prospective so that they can understand the needs and expectations of customers.
• Customer Service Management:This differs from management of relationships with customers because it is focused on the interaction between the customers and company, instead of an encompassing management approach. It assists in achieving an outcome that is mutually beneficial both for the customer and company. It also assists in getting the feedback of customers as well as maintaining communication between both parties to ensure that positive sentiments are generated for both sides.
• Demand Management Style Methodology to predict, plan and monitor the demands for goods and services. It can be applied to macro-levels such as the global economy, as well as smaller levels within the business.
• Order Fulfillment The procedure that covers everything from the point of sale up to the distribution of that item or services to the buyer. This is how an organization responds to customers’ demands.
• Manufacturing-Flow Management The manufacturing process is actually a procedure which supplies feed for the is based on historical data regarding how it was executed and what was required in the past. The process is not able to be flexible when the quantities are changing. So, the manager must oversee the entire process of the planning, scheduling and controlling your manufacturing processes.
• supplier relationship Management (SRM): The supply chain is likely to be sourced from a third-party which means that interactions with the third party must be planned strategically. SRM is essential to having the health of your supply chain.
• commercialization and product development In order to reduce the time it takes to market, both customers and suppliers are part of vision for the product and the design procedure. Making the process shorter ensures that the company is in a position to compete. The process involves coordinating with management of customer relationships in order to identify the customer’s needs as well as selecting the right the right materials and suppliers, coordinating purchasing and implementing production process technology within the cycle of manufacturing in order to create the most efficient supply chain to the market and product. When it’s successful, it can have positively impacted cost in terms of quality, speed of delivery, as well as market share.
• Returns Management There are always returns, and the better handled, the more effective and competitive the SCM process will become. The management of this part of SCM is fast and simple returns administration, automated and the decision of the best way to handle returned material. Be sure that information is accessible so that it can be captured early during the process. Control the flow of goods which includes reconciliations, receipts, and other documents and note if there are any quality concerns.

Benefits of Supply Chain Management

SCM is an arduous task that comes with substantial benefits. Below are some strategies that properly executed SCM can help your business or even your project.

Companies stay competitive and up-to-date by utilizing the latest technology

The simple reason SCM is crucial to any company is to help to keep them at the forefront of their industry. As markets change and markets become more international, the requirement to improve efficiency is essential. Management goals are changing as well, there’s shift away from old-fashioned relationships that were used to integrate and coordinate all business operations within a value chain that spans several businesses.

Technology advancements and outsourcing is gaining popularity can also contribute to the growth of the supply chain. The result is a demand for a better collaborative network so that different businesses are able to work together.

Creates Productive Environments

The changes in the way companies are run has resulted in the growth of supply chain systems. Joint ventures, multinational corporations as well as strategic alliances and alliances, in addition to technological advances have led to greater cooperation between those who are part of the supply chain. As supply chains grow more integrated and collaborative, businesses need to change their strategies.

Proactive Strategy

However, supply chain management does not just provide a reactive service, it is also a way to encourage creativity and increase productivity through helping organizations in learning organizationally. The larger a company has in their supply chains, the better flexible it needs to be. This leads to creative ideas, resulting in greater productivity and creativity.

Satisfies Customers While Reducing Operating Costs

Customers also benefit from customer service. They demand high-quality products and want their products available at the time they need and delivered on the scheduled date. Management of supply chain will provide support for sale after customers have made their purchase.

It’s not just customers who gain. In fact, SCM can be instrumental in reducing operating cost. Utilizing it correctly can reduce production, purchasing as well as total cost of supply changes. It improves the financial standing by increasing profits leverage, decreasing fixed assets, and increasing the cash flow.