What is supply chain management?
Supply chain management (SCM) is the combination of art and science
that goes into improving the way your company finds the raw components
it needs to make a product or service and deliver it to customers. The
following are five basic components of SCM.
1. Plan—This is the strategic portion of SCM. Companies need a
strategy for managing all the resources that go toward meeting customer
demand for their product or service. A big piece of SCM planning is
developing a set of metrics to monitor the supply chain so that it is
efficient, costs less and delivers high quality and value to customers.
2. Source—Next, companies must choose suppliers to deliver the
goods and services they need to create their product. Therefore, supply
chain managers must develop a set of pricing, delivery and payment
processes with suppliers and create metrics for monitoring and improving
the relationships. And then, SCM managers can put together processes
for managing their goods and services inventory, including receiving and
verifying shipments, transferring them to the manufacturing facilities
and authorizing supplier payments.
3. Make—This is the manufacturing step. Supply chain managers
schedule the activities necessary for production, testing, packaging and
preparation for delivery. This is the most metric-intensive portion of
the supply chain—one where companies are able to measure quality levels,
production output and worker productivity.
4. Deliver—This is the part that many SCM insiders refer to as
logistics, where companies coordinate the receipt of orders from
customers, develop a network of warehouses, pick carriers to get
products to customers and set up an invoicing system to receive
payments.
5. Return—This can be a problematic part of the supply chain
for many companies. Supply chain planners have to create a responsive
and flexible network for receiving defective and excess products back
from their customers and supporting customers who have problems with
delivered products..
SCM has allowed business nowadays to not just have productivity advantage alone but also on value advantage. As Martin Christopher in his book, Logistics and Supply Chain Management: Strategies for Reducing Cost and Improving Service' states, 'Productivity advantage gives a lower cost profile and the value advantage gives the product or offering a differential 'plus' over competitive offerings.' Through maximizing added value and also reduce the cost in the same time, more innovation can be added to the product and process. Mass manufacturing offers productivity advantage but through effective supply chain management, mass customization can be achieved. With mass customization, customers are given the value advantage through flexible manufacturing and customized adaptation. Product life cycles also can be improved through effective use of SCM.
BalasHapusEngineering Supplies Singapore