What is supply chain management?
Supply chain management is an integral part of the manufacturing process. Supply chain management (SCM) is defined as the management of the network of processes that are involved in manufacturing. Supply chain managers will follow the production process, from where it begins with the acquisition of raw materials through the work-in-process inventory, and finished goods, and then from point-of-origin to the point-of-consumption by the customer. This entire chain of events is appropriately named the supply chain. Efficient supply chain management is crucial, for the long-term success of the manufacturing organization. When manufacturers have a clear understanding of the supply chain process, they are much more likely to produce a cost-effective and successful, product.Here is a brief overview of aspects of the supply chain management-
- What is supply chain management-Supply chain management is designed to take care of the planning and management of all activities that are involved in sourcing, procurement, conversion, and logistics management activities. Business owners should understand that supply chain management can be tailored to meet the specific needs of any manufacturing organization. This is true whether the entire manufacturing process is done on sight or is out-sourced.
- What do supply chain managers do? The main purpose of supply chain managers is to address and resolve a variety of problems. The first problem that supply chain managers must address is Distribution Network Configuration. The Distribution Network Configuration of any manufacturing company refers to the number, location and network missions of suppliers, production facilities, distribution centers, warehouses, cross-docks and customers. It is the supply chain manager's responsibility to look at each of these elements. They must then carefully evaluate how efficiently they are fulfilling their role, in the overall supply chain. The next problem that supply chain managers are responsible for handling is referred to as the distribution strategy. The distribution strategy includes questions of the following factors:
1. operating control (centralized, decentralized or shared)
2. delivery scheme (direct shipment, pool point shipping, Cross docking, DSD (direct store delivery), closed loop shipping)
3. mode of transportation (motor carrier, including truckload, LTL, parcel; railroad; ocean freight; airfreight)
4. replenishment strategy (pull, push or hybrid)
5. transportation control (owner-operated, private carrier, common carrier, contract carrier)
- What is supply chain management suppose to do? Supply chain management is responsible, for assuring that all of the activities in the supply chain, are working well enough together that the manufacturer is consuming the least total costs. If there is one activity within the supply chain that is working better than others, that activity is then referred to as a trade-off. The ongoing job that the supply chain manager, has is to find a way to use these trade-offs, or parts of the supply chain, that are working the best, and find ways for that activity to strengthen and improve connecting activities, in the process. Trade-offs are usually optimized through the development of information, inventory management or cash flow.
- What is the ongoing process of supply chain management? It is the job of the supply chain management to ensure that their job is done in the best possible way, by coordinating the movement of materials, information and funds across the supply chain, in such a way that the company's resources and time are best optimized. This should mean that there is as little wasted time and materials being spent. It is important to understand that this process is ongoing as the manufacturing business, will consistently encounter the need to change their operations, as the needs of their customers change. Additionally, supply chain managers must always be working with the supply chain, looking for improvements in all their possible forms.