Today's world of unprecedented digitization in business and commerce In addition to continuous technological innovation and rapidly evolving customer expectations, companies now rely on the best supply chain management strategies as a demand-driven operating model that can successfully bring people, processes and technology together around integrated capacities to deliver goods and services with extraordinary speed and accuracy, What is the concept of supply chain management, that is what we will address in our article today.
Supply chain management concept
Supply chain management is the management of the flow of goods and services and includes all processes that transform raw materials into finished products, it involves the active streamlining of business supply side activities to maximize customer value and gain competitive advantage in the market.
Supply chain management oversees all processes involved in obtaining a product or service for customers, including procurement, production, inventory control and logistics.
Supply chain management plays an important role in achieving customer satisfaction by providing products and services. Good supply chain management is critical in reducing operating costs in procurement activities, operations, logistics functions and throughout the entire supply chain, and the size of profitability of large enterprises is about supply chain management.
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Supply chain management objectives
Supply chain management acts as a function to maximize value from all activities. The overall objectives of supply chain management are to create value, build competitive infrastructure, take advantage of logistics worldwide, synchronize supply with demand and measure performance. The following points must also be considered:
- Supply Chain Management (SCM) is about efficient and effective management of all activities from core suppliers to point of sale.
- Procurement and supply professionals should be increasingly involved in supply chain management, and they better play a leading role in their development wherever possible.
- Supply chain management requires a large sector-friendly sponsor, to get the best results.
- Supply Chain Management (SCM) plays a pivotal role within the organization, including the responsibility to predict and meet end customer demand down to suppliers.
How does supply chain management (SCM) work?
Supply Chain Management (SCM) represents an effort by suppliers to develop and implement supply chains that are as efficient and economical as possible, and the supply chain covers everything from production to product development to the information systems needed to guide these undertakings.
Supply chain management usually tries to centrally control or link product production, shipping and distribution, also through supply chain management, companies can reduce excess costs and deliver products to the consumer faster, this is done by maintaining stricter control over internal inventories, internal production, distribution, sales, and the inventory of the company's vendors.
Supply chain management relies on the idea that almost every product that comes to the market results from the efforts of the different organizations that make up the supply chain, and although supply chains have existed throughout the ages, most companies have only recently been interested in them as value added to their operations.
The supply chain can include many different companies, supply chain management is the way each company manages its internal performance and material flow to and from other companies, can be summarized as system management that enables companies and interconnected systems to create or distribute a product or service.
Best practices for supply chain management
To succeed in managing a supply chain, you need a continuous supply chain from start to finish, across your organization and beyond, here are the most important steps to succeed in managing the supply chain:
Planning
For the best results from supply chain management, the process usually starts with planning to match the offer to customer requirements and manufacturing, Companies must predict what their future needs will be and act accordingly and this relates to the raw materials needed during each stage of manufacture, Equipment capacity and constraints, staffing requirements along the supply chain management process, Large entities often rely on ERP modules to collect information and aggregate plans.
Sources
Effective supply chain management processes depend heavily on strong relations with suppliers. Identifying sources requires working with vendors to supply the raw materials needed during the manufacturing process. The company may be able to plan and work with a supplier of the source of goods beforehand. However, different industries will have different source requirements. Generally speaking, supply chain management sources include ensuring:
- Raw materials that meet the manufacturing specifications necessary for the production of goods.
- Prices paid for goods are in line with market expectations.
- The seller's flexibility in delivering emergency materials due to unforeseen events.
- The seller has proven record in delivering goods on time and with good quality.
Supply chain management is particularly important when manufacturers work with perishable goods, and when looking for goods, companies must take into account the lead time and the supplier's compliance with those needs.
Manufacture
At the heart of the supply chain management process, the company transforms raw materials using machinery, labor or other external forces to make something new, and this final product is the ultimate goal of the manufacturing process, although it is not the final stage of supply chain management.
The manufacturing process can be divided into sub-tasks such as assembly, testing, inspection or packing and during the manufacturing process, the company must be aware of the wastes or other controllable factors that may cause deviations from the original plans For example, if the company uses more raw materials than planned and sources due to a lack of staff training management ", the company must correct the problem or reconsider the earlier stages of supply chain management.
Delivery
Once the products are manufactured and sales finished, the company must put the products in the hands of its customers, and the distribution process is often seen as a shareholder in the brand image, up to this point, the customer has not yet interacted with the product.
During robust supply chain management operations, the company has strong logistical capabilities and delivery channels to ensure timely, safe and inexpensive delivery of products, including various backups or distribution methods if one mode of transportation is temporarily unusable.
Conclusion:
Supply chain management is a key part of business from previous eras, but today's supply chain is more important than ever as a sign of business success. Companies that are able to manage their supply chains effectively, to adapt to a volatile and ever-changing business environment, which is technology-driven, are companies that are more likely to grow and develop.
Important Topics
Reference
1. << Five Incremental Changes to Improve Supply Chain Performance>>, supplychainbrain
2. <<L 'innovation en supply chain: slow logistics>>, voxlog
2. <<L 'innovation en supply chain: slow logistics>>, voxlog
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