What Does Supply Chain Refer To?

The Function of a supply chain management plan is an organizational design to move products physically through it.  The way a particular supply chain moves products through can be different or similar to another.  What is essential is where your whole business is in its respective supply chain, everything including the products, and services you supply.

Strategic Supply Chain Management is crucial to a business.  Many large companies have a hierarchy of managerial positions with different responsibilities; all are still part of a consolidated supply chain.

If you start your own business, whether selling on FBA or any other sales channel; you will have to be an expert in many responsibilities and going over this article beforehand will definitely allow you to learn the benefits that Supply Chain Management can have on your business.  Read the article thinking about the business you want to start (or the operations of your current business) and create ideas of how you could incorporate the following ideas into operations.

The next best step is to hire someone who strictly provides managerial support for the operations that are crucial to the Supply Chain.

Benefits of Good Management

Many improvements can come from a good focus on Supply Chain Management, these include:

• Flexibility for changes
• Lower costs of:
  • Inventory
  • Transportation
  • Storage
• Performance
• Profitability

Imagine if you put some time aside for the supply chain management to be your only focus.

You could call Distributors, and Exporters; find ways to lower your costs; a crucial tactic to make your business sustainable.

Many firms attempt as much integration as possible.  Multiple units coordinate processes together; trying to link consumer demand with the business’ supply with constant improvement.

The Scope of a Supply Chain

A Supply Chain Management Strategy can affect operations in other departments.

Customer Relationship Management

• Creating Long Term Value – providing products and services that creates long term value to customer whether it is installation, guidance on complimentary and substitute parts, or repair guidance.
• Customer Groups – understanding the different types of customers you service is important.  If you manufacture computers; you have the less excessive needs of administrative, clerical or educational demands versus the more excessive and growing needs for engineering, or research and development fields.
• Marketing Focus – What markets do you focus on, and the differences between marketing strategies for each market or customer group you serve.
• Social Corporate Responsibility – knowing about the places and people that are part of your supply is crucial.  The public rewards companies who supplies their business ethically, locally, and securely.  Know how your business impacts the employees of suppliers, try to find ways to benefit the home areas of your customers, and have contingencies and risk management planned out to sustain supply chains from  disruptions.

Customer Service Representatives

• Comments – gain insight from consumer to better understand the demand you fulfill.
• Complaints – show all future customers and observers you are reasonable to try and solve issues with respect to both parties when possible.
• Questions – answer questions and create ease and familiarity with customer

 Demand

• Predict Customer Behavior and Demand
• Observe how supply is meeting demand

Manufacturing Management

• Resource Flexibility
• Resource Security
• Resource Management
• Manufacturing Management
• Contingencies

Order Fulfillment

• Delivery time was the most recent area where Amazon changed the market in gaining consumer expectations of fast shipping for items ordered online, because Amazon allowed so many opportunities for people to receive items quickly; many consumers now prefer it and will reward the supply source that makes that happen.
• costs of packaging,
• returns policies and retention.

Product Development

• Promotion of new offerings, changes to improve product.

Returns Management

• Effective Return Processes
• Maximizing value of returned assets
• Minimizing Return Related Costs

Supply Management

• Maintain and document relationships to valued suppliers.

Getting A Grasp of the Supply Chain

Main Components of a Strategic Supply Chain Management Plan should include focus on these areas of operation.

1. Inventory Control can be achieved but require an observation of many factors focusing on demand, development, and management.  This is relevant  because agents responsible for purchasing and supply chain management supervisors, have a common interest.
   • Consumer Demand
   • Developing and Maintaining Products and Services to meet Consumer’s and Manufacturer’s Demand
   • Cycle, In-transit, Safety of storage, Seasonal opportunities, Work-in-process Inventory.
   • Inventory Management
     1. Supplier to Manufacturer
     2. Delivery to end user
     3. Forecasting

2. Order Processing
   • How Orders are entered and filled
3. Production Scheduling
   • Mass Production Manufacturing and starting Production based on inventory is a push strategy
   • Customer-Order Focus and Mass customization in manufacturing is a pull strategy
4. Supply Management
   • Develop Specifications
   • Negotiate Price
   • Plan Strategies
   • Select Suppliers
5. Transportation
   1. How products and services move whether it is Air, Cable, Pipe, Sea, Rail, or Street
   2. Criteria for transportation design
      1. Accessibility
      2. Capability
      3. Cost
      4. Reliability
      5. Traceability
      6. Transit Time
      7. Warehousing and Materials Handling
      8. How inventory is moved in, out, and within warehouse or business unit.

NEW SUPPLY CHAIN MANAGEMENT TECHNIQUES

• Electronic Distribution
• Outsourcing Logistics Functions
  • Improves Quality of Service
  • Locates Stock at fewer plants and distribution centers
  • Reduces Inventories
• Supply Resilience, Risk, Security
  • Preemptive measures to protect inventory and other assets.
  • Reactive measures in place to sustain supply chains if it encounters disruption.
  • Risk management of supply is crucial

Further Readings

If you want to learn more we will list other sources of good content as we find them.

Wow!  What a great collection of articles documenting efforts to introduce green, sustainable, and environmentally friendly principles into your supply chain!  Check out Ecovadis’ Green Supply Chain Management News

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