Monday, August 5, 2019
What is the Supply Chain Management (SCM)?
What is the Supply Chain Management (SCM)? The best companies around the world are discovering aà powerful new source of competitive advantage. Its called supply-chain management and it encompasses all of thoseà integrated activities that bring product to market and createà satisfied customers. The Supply Chain Management Program integrates topics fromà manufacturing operations, purchasing, transportation, andà physical distribution into a unified program. Successful supplychainà management, then, coordinates and integrates all of theseà activities into a seamless process. It embraces and links all ofà the partners in the chain. In addition to the departments withinà the organization, these partners include vendors, carriers, thirdpartyà companies, and information systems providers. Within the organisation, the supply chain refers to a wide range of functional areas. Theseà include Supply Chain Management-related activities such as inbound and outboundà transportation, warehousing, and inventory control. Sourcing, procurement, and supplyà management fall under the supply-chain umbrella, too. Forecasting, production planningà and scheduling, order processing, and customer service all are part of the process as well.à Importantly, it also embodies the information systems so necessary to monitor all of theseà activities. Simply stated, the supply chain encompasses all of those activities associated withà moving goods from the raw-materials stage through to the end user.à Advocates for this business process realised that significant productivity increases couldà only come from managing relationships, information, and material flow across enterpriseà borders. What is the importance of Supply Chain Management In the ancient Greek fable about the tortoise and the hare, the speedy and overconfidentà rabbit fell asleep on the job, while the slow and steady turtle won the race. That mayà have been true in Aesops time, but in todays demanding business environment, slowà and steady wont get you out of the starting gate, let alone win any races. Managers theseà days recognise that getting products to customers faster than the competition will improveà a companys competitive position. To remain competitive, companies must seek newà solutions to important Supply Chain Management issues such as modal analysis, supplyà chain management, load planning, route planning and distribution network design.à Companies must face corporate challenges that impact Supply Chain Management suchà as reengineering globalisation and outsourcing.à Why is it so important for companies to get products to their customers quickly? Fasterà product availability is key to increasing sales,à An example of a Supply Chain Management application:à To Reduce Cycle Time, Kick Those Bad Habitsà ..One of the chief causes of excessive order-to-delivery cycle times is the existence of longstandingà bad habits that result when companies fail to revise internal processes to reflect marketà changes. The existence of separate, independent departments tends to perpetuate these inefficientà practices. Taking the supply-chain management view, on the other hand, helps companies identifyà the cumulative effects of those individual procedures. Eliminating such bottlenecks improvesà product availability and speeds delivery to customersboth of which can increase sales and profits.à Supply Chain Management Todayà If we take the view that Supply Chain Management is what Supply Chain Managementà people do, then in 1997 Supply Chain Management has a firm hand on all aspects ofà physical distribution and materials management. Seventy-five percent or more ofà respondents included the following activities as part of their companys Supply Chainà Management department functions:à Inventory management Transportation service procurement Materials handling Inbound transportation Transportation operations management Warehousing management Moreover, the Supply Chain Management department is expected to increase its range ofà responsibilities, most often in line with the thinking that sees the order fulfilment processà as one co-ordinated set of activities. Thus the functions most often cited as planning toà formally include in the Supply Chain Management department are:à Customer service performance monitoringà Order processing/customer service Supply Chain Management budget forecasting On the other hand, there are certain functions which some of us might feel logicallyà belong to Supply Chain Management which companies feel are the proper domain of other departments. Most difficult to bring under the umbrella of Supply Chainà Management are: Third party invoice payment/audit Sales forecasting Master production planning Write-in responses reveal the leading edge of what some Supply Chain Managementà departments are doing. These include engineering change control for packaging; customà Today Supply Chain Management includes services such as: Operational Analysis and Design Materials Handling Distribution Strategy Operational Improvements, Distribution Management Computer Systems Warehouse Design Project Management Operational Commissioning Computer Simulation Technical seminars
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