1. Material flow from suppliers and their 'upstream' suppliers at all level
2. Transformation of material into semi-finished or finished product through the organization's production process.
3. Distribution of products to customers and their 'downstream' customers at all level
Basics of Supply Chain Management
-Plan
A company must have a plan for managing all the resources that go toward meeting customer demand for products or services.- Source
Companies must carefully choose reliable suppliers that will deliver goods and services required for making products.
- Make
This is the step where companies manufacturing their product or services. This
can include scheduling the activities necessary for production, testing, packaging, and preparing for delivery
- Deliver (Logistic)
Companies must be able to receive orders from customers, fulfill the orders via
a network of warehouses, pick transportation companies to deliver the
products, and implement a billing and invoicing system to facilitate payments.
- Return
This is typically the most problematic step in the supply chain. Companies must create a network for receiving defective and excess products and support customers who have problems with delivered products.
Visibility
- Visibility – more visible models of different ways to do things in the supply chain have emerged. High visibility in the supply chain is changing industries, as Wal-Mart demonstrated- Supply chain visibility – the ability to view all areas up and down the supply chain- Bullwhip effect – occurs when distorted product demand information passes from one entity to the next throughout the supply chain-Supply chain visibility allows organizations to eliminate the bullwhip effect
Consumer Behavior- Companies can respond faster and more effectively to consumer demands through supply chain enhances- Once an organization understands customer demand and its effect on the supply chain it can begin to estimate the impact that its supply chain will have on its customers and ultimately the organizations performance- Demand planning software – generates demand forecasts using statistical tools and forecasting techniques
Competition- Supply chain planning (SCP) software– uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain- Supply chain execution (SCE) software – automates the different steps and stages of the supply chain- SCP and SCE both increase a company’s ability to compete- SCP depends entirely on information for its accuracy- SCE can be as simple as electronically routing orders from a manufacturer to a supplier- Competition
- SCP and SCE in the supply chain
Speed
- Three factors fostering speed
Competition- Supply chain planning (SCP) software– uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain- Supply chain execution (SCE) software – automates the different steps and stages of the supply chain- SCP and SCE both increase a company’s ability to compete- SCP depends entirely on information for its accuracy- SCE can be as simple as electronically routing orders from a manufacturer to a supplier- Competition
- SCP and SCE in the supply chain
Speed
- Three factors fostering speed
- Supply Chain Management
Success Factors
Success Factors
SCM industry best practices include:
- Make the sale to suppliers
- Wean employees off traditional business practices
- Ensure the SCM system supports the organizational goals
- Deploy in incremental phases and measure and communicate success
- Be future oriented
SCM Success Stories
- Top reasons why more and more executives are turning to SCM to manage their extended enterprises
- Numerous decision support systems (DSSs) are being built to assist decision makers in the design and operation of integrated supply chains
- DSSs allow managers to examine performance and relationships over the supply chain and among:
- Suppliers
- Manufacturers
- Distributors
- Other factors that optimize supply chain performance
SUPPLY CHAIN MANAGEMENT Success Stories
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