This article briefly gives information of supply chain management and its various phases. In every business there is a stream of processes of moving goods from the customer order of raw material stage, supply production, and distribution of products to the customer. All organization has supply chains of varying degrees, depending upon the size of the organization and type of product manufactured. These networks obtain supplies and components, change these materials into finished products and then distribute to customer.
Managing the chain of events in this process is what is known as supply chain management effective management must take into account coordinating all the different pieces of this chain as quickly as possible without losing any of quality or customer satisfaction, while still keeping cost down.
The first step is obtaining a customer order, followed by production storage and distribution of products and supplies to the customer site. Customer satisfaction is paramount .include in this supply chain process are customer service. A necessity in coordinating all these activities is the information service network.
In addition, key to the success of a supply chain is the speed in which these activities can be accomplished and the realization that customer needs and customer satisfaction are the very reason for network. Reduced inventories, lower operating cost, product availability and customer satisfaction are all benefits which grow out of effective supply chain management.
There are six key elements of supply chain management:
Strategic decisions regarding production focus on what customer want and the market demands .this first stage in developing supply chain management takes into considerations what and how many products to produce ,and what if any, parts of components should produced a which outsourced to capability suppliers.
These strategic dimensions regarding production must also focus on what capacity, quality and quantity of goods, keeping in mind that customer demand and we should meet needs. Operation decisions on the other hand, always try to have focus on schedule of workloads and maintaining of equipment and meeting immediate client market demands.
Next an organization must determine what their facility or facilitated are able to produce both economically and efficiently ,while keeping the quality high .But most companies cannot provide excellent performance with the manufacturer of all components .outsourcing is an excellent performance with the manufacturer of all component .companies must carefully select suppliers for raw materials when choosing a supplier focus should be on develop grade, quality and how flexible will it be while at the same time reducing cost or maintaining low accost levels . In short strategic decision should be made to determine the core capabilities of a facility and outsourcing partnership should grow from these decisions.
Further strategic decision focus on inventory and how much product should be in house. A dedicate balance exists between too much inventory .which can cost anywhere between 20 and 40 percent of their value and not enough inventory to meet market demands .this is a critical issue in effective supply chain management. Operational inventory decision revolved around optimal levels of stock at each location to ensure customer satisfactions as the market demands fluctuate .control policies must be looked at to determiner correct levels of suppliers at in order points. These levels are critical to the day to day operation of organization and to keep customer satisfaction levels high.
Location decision depend on market demands and determination of customer satisfaction .strategic decision must focus on the placement of production plants, distributing and to provide stocking facilities and placing them in prime locations to the market are determined long term commitment must be made to locate production areas and stocking facilities as close to consumer as is practical .Industries where component are lightweight and market driven facilities should be located close to the ends user. In heavier industrious, careful consideration must be made to determine where plants should be located so as to be close to the raw material source .decisions concerning location should also take into consideration tax and tariff issues especially in inter nation and worldwide distribution.
Supply chain management requires ,obtaining information from the point of end use and linking information resources throughout the chain for sped of exchange overwhelming paper flow and desperate computer systems are unacceptable in today’s completive world fostering innovation requires good organization of information linking computer through networks and the internet and streaming the information flow, consolidate knowledge and facilities velocity of products. Account management software, product configurations’ enterprise resource planning system and global communications are key components of effective supply chain management strategy
Strategic transportation decision are closely related to inventory decisions as well as the meeting customer details ands demands .using air transport obviously gets the product out quicker rand to the customer expediently ,but the costs are high as opposed to shipping by boat or rail. yet the using sea or rail often times means having higher levels to inventory in hose to meet quick demands by the customer .it is wise to keep in mind that since 30% of the cost o production. is encompassed in production. For the customer service level must be met be an operational decision but strategic an organization must have transport must have transport modes in place to ensure a smooth distribution of goods.
Applications of supply chain management
1. Fast delivery is critical in most markets today.
Many companies address this market demand by carrying higher inventories .inventory is a hedge against leads time. Higher levels of inventory are often maintained because a company is unable to produce the material with estimated time.
2. Analyzing the process in supply chain management can identify the causes and facilitate solutions to reduce overall through them.
3. Supply chain management help to produce and increase overall inefficiency it helps you to identify gaps and issues within your supply chain, without finding data collection at all and any levels your decisions makers won’t know there problems lie and opportunities exist. This will eventually lead to a misalignment of resources that your company cannot afford.
4. Today’s technology has made organizing scattered information simpler than ever connecting your business a crises a network, constantly collecting the info and reducing that info into actionable reporting should be equal parts of yours 21st century chain. Only that is the way to we can you move at the speed of today’s business leaders.