More about Supply Chain Management
There are some terms and phrases whose very names seem intimidating. For instance, supply chain management is a term I have always feared and the complex definitions on the Internet didn’t help my case either. Simply put, supply chain management or SCM is the flow of finished products, work-in-progress, or raw materials from the point of origin to the point of consumption. The complexity and size of a supply chain depends on the kind of industry and business, but the common elements of a supply chain are described as follows:
1.Customer
The customer is perhaps the most important element of the supply chain as the demand for a product offered a company is what sets the supply chain in motion. The cycle culminates with the delivery of product to the customer. Without an end user, there is no supply chain or supply chain management.
2.Planning
In the case of on-demand products, the company comes up with a production plan in order to fulfil the orders of the customers. From purchasing of the raw materials to producing the actual product- these are decided by the company for composing the production plan.
3.Purchasing
The purchasing department purchases the raw material in accord with the production plan that specifies the kind of raw materials and their quantity required by the production department to fulfil the orders.
4.Inventory
Upon receiving the raw materials from the suppliers, the manufacturers check them for accuracy and quality and then move them to the modern industrial space meant for storage of goods. The raw materials are stored in the warehouses until they are needed by the production department for the manufacturing process.
5.Production
As per the production plan, the raw materials are moved from the warehouse to the production area, and then begins the production process. Post-production, the finished products as per the requirements are moved and stored in the warehouse until initiation of the delivery procedure.
6.Transportation
Upon receipt of the finished product in the warehouse, the shipping department determines a suitable method for delivery of the product to the final destination. Another method that has become quite common nowadays, especially in the e-commerce business, is that a third party specialising in shipping services is partnered with. In either scenario, once the product reaches the end customer, the invoice is either sent online or along with the actual product itself.
Supply chain management comes into the picture to streamline the various processes for supply chain to operate efficiently and for the highest level of satisfaction to the various levels of the supply chain.
The following activities across different parts of the company facilitate supply chain management:
1.Strategic:
Taken at the top level management, strategic decisions impact the organisation as a whole. The decisions include size and location of the industrial space, whether it’s to be taken on rent or bought, partnering with suppliers, products to be manufactured, as well as identifying target markets. Since these are major decisions that cannot be usually reversed, a lot of time, energy, and hard work need to go in for the research and analysis. IndoSpace modern industrial space is a very popular option that businesses consider.
2.Tactical:
Such decisions are directed towards cost benefits by adopting a mix of best industry practices, developing an efficient purchasing strategy with the suppliers, arriving at minimal transportations costs by taking into account various alternatives, as well as developing warehouse strategies focused on cost reduction of inventory. My friend while looking for warehouse space in Pune for her flourishing business, drew out a detailed plan in order to minimise the inventory costs.
3.Operational: Operational decisions are the basic day-to-day decisions that immediately affect the products along the supply chain. Such decisions impact purchasing agreements with the suppliers, taking orders from the customers, and movement of the products about the warehouse.
So whether you are responsible for making strategic decisions including finding warehouse for rent in Pune or any other city; tactical decisions involving cost savings by employing various methods; or operational decisions including day-to-day operations, you need to be thorough. Only then will you be able to give the best to your partners in business as well as your suppliers and/or customers. Best of luck!
1.Customer
The customer is perhaps the most important element of the supply chain as the demand for a product offered a company is what sets the supply chain in motion. The cycle culminates with the delivery of product to the customer. Without an end user, there is no supply chain or supply chain management.
2.Planning
In the case of on-demand products, the company comes up with a production plan in order to fulfil the orders of the customers. From purchasing of the raw materials to producing the actual product- these are decided by the company for composing the production plan.
3.Purchasing
The purchasing department purchases the raw material in accord with the production plan that specifies the kind of raw materials and their quantity required by the production department to fulfil the orders.
4.Inventory
Upon receiving the raw materials from the suppliers, the manufacturers check them for accuracy and quality and then move them to the modern industrial space meant for storage of goods. The raw materials are stored in the warehouses until they are needed by the production department for the manufacturing process.
5.Production
As per the production plan, the raw materials are moved from the warehouse to the production area, and then begins the production process. Post-production, the finished products as per the requirements are moved and stored in the warehouse until initiation of the delivery procedure.
6.Transportation
Upon receipt of the finished product in the warehouse, the shipping department determines a suitable method for delivery of the product to the final destination. Another method that has become quite common nowadays, especially in the e-commerce business, is that a third party specialising in shipping services is partnered with. In either scenario, once the product reaches the end customer, the invoice is either sent online or along with the actual product itself.
Supply chain management comes into the picture to streamline the various processes for supply chain to operate efficiently and for the highest level of satisfaction to the various levels of the supply chain.
The following activities across different parts of the company facilitate supply chain management:
1.Strategic:
Taken at the top level management, strategic decisions impact the organisation as a whole. The decisions include size and location of the industrial space, whether it’s to be taken on rent or bought, partnering with suppliers, products to be manufactured, as well as identifying target markets. Since these are major decisions that cannot be usually reversed, a lot of time, energy, and hard work need to go in for the research and analysis. IndoSpace modern industrial space is a very popular option that businesses consider.
2.Tactical:
Such decisions are directed towards cost benefits by adopting a mix of best industry practices, developing an efficient purchasing strategy with the suppliers, arriving at minimal transportations costs by taking into account various alternatives, as well as developing warehouse strategies focused on cost reduction of inventory. My friend while looking for warehouse space in Pune for her flourishing business, drew out a detailed plan in order to minimise the inventory costs.
3.Operational: Operational decisions are the basic day-to-day decisions that immediately affect the products along the supply chain. Such decisions impact purchasing agreements with the suppliers, taking orders from the customers, and movement of the products about the warehouse.
So whether you are responsible for making strategic decisions including finding warehouse for rent in Pune or any other city; tactical decisions involving cost savings by employing various methods; or operational decisions including day-to-day operations, you need to be thorough. Only then will you be able to give the best to your partners in business as well as your suppliers and/or customers. Best of luck!
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