An Introduction to Supply Chain Management – Part 1

August 23, 2011 by  Filed under: Management 

Supply Chain Management is the process in which a company produces and distributes products to its intended target audience. There are a number of specific factors, which are crucial and need to be considered; production planning, material sourcing, transportation management, warehouse management and demand management. The intention of the process is intended to provide products and services to the consumer in a efficient and profitable manner. In addition to these internal elements, the supply chain also takes into account the processes of external considerations, these can include materials and parts suppliers, manufacturers, distributors and transportation providers. The process does not only consist of the movement of goods but also the flow of information concerning products or services and funds.

Individuals who have experience of the process will be aware that it is essential to have a solid awareness of the underlying principles involved within the process. It is crucial to remember that the majority of systems are constructed along the basic principles, in the beginning this process runs at a satisfactory level but as they mature, various problems occur and soon become evident. These are usually encountered during maturation and is required to meet an increasing list of tasks and strategies. As the process can be considered to be evolutionary by nature due to the variants of demand, problems are often seen where the basics are deviated away from and companies are unable to meet their intended targets and objectives. It it therefore imperative to remember to keep a list of the basics nearby and continually monitor and assess progress.

The main concern of those managing a supply chain is the speed and efficiency of the products reaching their intended consumer. Of course, the faster the stock reaches the consumer, the more effective the supply chain is going to be considered to be. It is obvious that this is the most crucial elements and should always be at the forefront of the manager’s mind when considering their chain. This highlights the fact that it is essential for the supply chain to have enough of the right elements to deliver products in this manner, however, many supply chains often take a cautious approach and end up having too many of these parts and do not consider other elements quite so much, this can be damaging for their interests in the long term.

With this in mind, it is important to consider how stock enters the supply chain. The way in which stock exists in a supply chain is crucial for any or three of these reasons; it is the most economical way to move products from point A to point B, the variable nature of supply, including delivery failures and failure of product quality and the variable nature of demand, both in quantities and timing. This variable nature of demand is what many believe to be disruptive to the supply chain and this had led to many focusing on improving their forecast models. However, an improvement in the response time of the supply chain is just as, if not more valuable than an improved forecast. The speed in which you can transfer information concerning actual usage back to the top of the chain, the more effectively you can adjust to the increases and decreases in demand. This helps to ensure that the right numbers of each part enter the supply chain before they are required. This extra time also allows you extra ability in relation to shipping and storing parts, leading to a decrease in overall costs. This requires awareness of the entire flow of materials, not just within your own company but also from external sources, even if it is two or three tiers removed. It is therefore essential and imperative to ensure that any delay in the transfer of information is eliminated.

Waer Systems are inventory management specialists and have over a decades experience in providing businesses with Supply Chain Management software and assisting them in developing the most effective Supply Chain Management Solution

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