Supply chain management will help you track every operation around your goods and services, ensuring efficiency in the workplace.
Supply Chain Management (SCM) is the proper management of goods and services from its raw material stage to their delivery as a final product. It represents the contribution made by managers, business owners, and employees to streamline the development and supply of a product to customers. The concept of product supply and a network of suppliers, manufacturers, and producers has been around for a long time, but the term "supply chain management" wasn't coined until the 1980s. Since then, SCM has driven the notion of efficient and effective product development and supply.
When manufacturers, production companies, or business enterprises start to create or produce goods and services, the most important thing is ensuring the final product supply is seamless, efficient, and safe. SCM therefore aims toward customer satisfaction as it embodies the logistics process of products and how to manage the supply of products in a bad economy in the post-pandemic era.
An excellent supply chain management means that every process, step, and procedure involved in the delivery of goods and services have gone through proper audit and evaluation, ensuring it is cost-efficient, safe, and seamless. A good supply chain manager will ensure that they erase any loopholes that can affect the smooth supply or delivery of products to customers.
SCM is a systematic concept; it has various components or features that support its success. From raw material procurement to final product and maximization of customer value, the supply chain aims to simplify all processes that allow a company's supply chain to run efficiently.
The SCM practice focuses primarily on the successful management of operations, procurement, system and industrial engineering logistics, and also helps to improve the technology involved in marketing. SCM also strives for an integrated course of actions that takes discipline and total quality control in business.
Most organizations or companies today rely on SCM to stay competitive in the global market and networked economy. Competitive businesses now strive to achieve excellent product planning, demand planning, supply planning, sales and operations planning, and supply management.
1. The business process of supply chain
2. The five most critical elements of supply chain management
3. The types of supply chain model
4. Why supply chain management and planning is important
SCM only becomes successful through the proper integration of necessary activities into the supply chain process. This helps streamline the entire management system by laying out an order of operational instructions to safely and efficiently manage the supply of goods to customers. In 2004, Douglas M. Lambert, Director of the Global Supply Chain Forum, pointed out a list of vital supply-chain practices which we can further summarize as the following:
To ensure that the supply chain is effective, managers try to implement strategies to cut costs and minimize shortages. These strategies are supply chain management components that promote productivity and efficiency in the entire cycle of product creation, development, and delivery. These five-part strategies are:
Planning, as we know, is a necessary stage for all processes or projects. In the process of supply chain management, planning involves coming together as an organization to evaluate the requirements for the company to meet customer expectations and their future goals. Because of this, organizations consider the competency of the current staff, the capacity and limitations of each piece of equipment and machinery, and the raw materials needed in each manufacturing stage. If any of these do not meet the required standard intended to favor organizational goals and customer needs, managers will try to compromise for that by planning.
Sourcing is simply working with partners outside the original organizational team that will help supply raw materials necessary in each manufacturing stage. Your supplier, who is also your vendor, must be able to comply with specific requirements based on the type of goods to be delivered. If you aim to outsource suppliers, asking for a record of their last successful delivery would be helpful. Make sure that the record entails them delivering goods on time (both raw materials, equipment, and finished products) and in good quality.
The manufacturing process of a product is the heart of SCM; a product's manufacturing process determines the supply chain's workflow. Without a final product or goods to be transported to a customer's location, there will be no supply chain in the first place. The processes involved in the manufacturing process are assembly, testing, inspection, and packaging.
After a product goes through the final stage of manufacturing, if it's not mandated for assessment, evaluation, and review, the next step usually involves packaging it and sending it out to customers. Large organizations ensure that their delivery personnel, channel, and routes are in the right condition for on-time delivery of goods in perfect quality. For utmost efficiency and effectiveness, backup delivery components like extra routes, channels, and staff are ready for deployment should anything jeopardize the functionality of the previous components. In line with backup delivery components, it would also be beneficial to have an alternative distribution method if one fails to yield a positive result.
Reverse logistics, also termed "Returning," involves customer and product returns. Say a customer develops a reason to return a good; it is the responsibility of the organization or company to handle the interaction successfully, especially if the reason is the company's fault. An organization must be capable of accommodating customer returns and assigning refunds for returns received. To avoid future returns, organizations should strive to use a product return scenario to highlight the possible defects on a returned product and identify non-conforming goods and expired products.
The implementation of a supply chain management system differs per company as each possesses different goals, strengths, features, and weaknesses; hence different approaches are used to implement supply chain management properly. The type of company involved will determine what the supply chain management process will look like. Because of this, six different types of SCM models are available for a business or organization to implement. They are as follows:
SCM and planning is essential because, without an effective and efficient supply chain, the reason for producing and manufacturing goods to sell to customers cannot be fulfilled. SCM is integral to major international companies and businesses with wide-scale operations. It helps maintain good consumer brand identity, good customer relationships, good inventory management and control, and successful business transactions. Supply chain planning can help a company meet stated annual goals and keep up with other organizations in terms of efficiency and delivery. SCM proves helpful in organizations making the following objectives achievable:
This would be the "Continuous Flow Model" - it is ideal for businesses that produce the same goods consistently with high demand.
Keith Oliver, who was a British logistician and consultant, coined the term "supply chain management" back in 1982, although the concept can be traced back to the 20th century.
Some examples would include: design, manufacturing, farming, packaging, and transportation, to name a few.
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