Essentials of Supply Chain Management

In commerce operations, a supply chain is defined as a network of facilities and distribution, organizations, people, activities, information, and resources involved in supplying a product or service to a consumer. Supply chain activities involve the transformation of natural resources, raw materials, and components into a finished product and to the end customer. In sophisticated supply chain systems, used products may re-enter the supply chain at any point where the residual value is recyclable. Supply chains link value chains. In general, supply chains exist in both service and manufacturing organizations, even though the complexity of the chain may significantly vary from one industry to another. Given the importance of supply chain performance to business success, you would like to know how well your organization and its supply chain partners are performing in comparison to your competitors’ supply chain performance. Here are the essentials of an effective, resilient, and sustainable supply chain management solution. These are important components of every successful business’ supply chain management in every industry.

Operational Excellence

Modern Commerce Supply Chain Management needs to continuously improve production performance and achieve goals. It is essential in streamlining critical business processes among companies to ensure that all goods—from raw materials to finished products—move through warehouses in the smoothest and most efficient manner. The process of gathering parts and other items to make a finished product is made up of multiple components. Errors during manufacturing operations can happen, workers get busy during peak seasons, and damaged products can slip through. Necessary corrective actions need to be taken in order to check the errors and control measures to avoid the reoccurrence of the same mistake. Operational Excellence is supported by outstanding Quality Assurance that will determine the parameters needed to assure significant quality control.

Tracking and Reporting

Supply chain management involves a lot of processes and paperwork, which makes the whole supply process a bit complicated. But with top tier supply chain management software, all the supply chain processes can get simplified. It will provide better coordination, collaboration, and communication with your shipping companies, transporters, vendors, and consumers in an effective and efficient manner. Supply Chain Performance and its impact needs to be tracked to identify potential problems that will result in a declining market share, flattening profits etc. Forecasting performance serves as a monitoring tool that can help your organization determine whether you are meeting your performance goals. Free-flow of your inventory tracking will give more in-depth insight into processes across the organization. It will also allow the utilization of synergies and identification of problems at the root. You can also follow and keep track of your distributor or supplier activities. This information can be shared with other stakeholders along the supply chain so that the whole process runs smoothly.

Expertise and Technology

Supply Chain Management has existed for as long as man has manufactured, sold and shipped products. It is important to know your product, where it is, and how much can be sold. Inventory control, tracking and recording tools were developed in response to this need such as perpetual inventory balances, inventory tracking etc. for the early age of supply chain management. These systems required people to key-in critical information which resulted in typical human entry errors.

Technology innovated tools and processes that improved our modern supply chain management. It enabled organizations to get more accurate and real time reports than the old card type records that have tons of limits and drawbacks. In a fast paced nature of supply chain where product has to be shipped, workers and managers need real time tracking and reports which translate into a more efficient supply chain. Digital Supply Chain Management has the ability to direct associates working both hands free and eyes free through modern tools and technology that helps minimize the process of supply chain and then maximize efficiency.

Agile Supply Chain

Supply-chain management should be responsive, competent, and flexible. Industries shift, trends change, media hype comes and goes, and customers go elsewhere. Keep in mind that modifying or changing or even disruption on your supply-chains strategy may happen any time whenever you need to go in a new direction or supply chain process, so you don’t get left behind. Supply chain breakdowns cause disruptions, and it is important that your supply chain is resilient by recovering quickly and going back to the original situation or evolving to something better in customer service, market share and performance. Quick response and readiness of your SCM (Supply Chain Management) is vital. However, you have to keep in mind that you should always limit the risk of supply-chain breakdown. Supply Chain Management can quickly be disrupted through natural causes, acts of war, environmental issues, and industry-wide shortages. Limit your risk through second sourcing, auditing environmental and social compliances, and creating inventory plans that ensure supply chain resilience.

Sustainable Supply Chain Management Strategy

Choosing the right Supply Chain Management System is an important part of reaching your company goals. It should direct your business to an ethical business behavior that will be able to achieve, manage and maintain compliance with all applicable regulations and policies for all aspects of your industry. Ideally, your supply chain management team should ensure that all processes are carefully planned and faithfully executed.

Contact us today to learn more about the essentials of supply chain management and how it can provide you with a sensible solution to every business process of your organization.