Supply Chain Management
The term Supply Chain Management is a very familiar term in today's business world. It
refers to the processes which involves from the acquiring of the raw material stage to the
production stage to the distribution until it finally reaches the customer in an efficient and
effective manner. It involves activities like sourcing, procurement, production along with
the logistics activities.
With globalization having a great impact on the supply chain management, it has become
very important for the organizations to have global networking. A lot of changes are seen
in the corporates in terms of procurement, production and distribution. With the
organizations becoming more and more focused on the efficiency and the effectiveness of
the various core competencies stated earlier the companies have relatively opted to
outsource the other activities to a much effective destination. The main focus here is to
satisfy the existing and the new customers by matching or bettering the demands of the
customers. This in turn will ensure the smooth functioning of the supply chain partners
thus giving way for better and competitive edge to the work flow.
Strategic planning, operative planning, product planning, production planning, supplier
management, logistics management, sales forecasting and order fulfillment play a very
vital role in the success of the smooth work flow. SCM has to go through a lot of
complexities both internally and externally ranging from product designs to the price
configurations till the delivery of them to the customers.
The key components of Supply Chain Management include:
1. Strategic planning: Quality planning has to be done for the implementation and
optimization of the necessary tools for determining the location, size and the kind of
facilities opted in order to meet the customer service goals.
2. Demand Planning: Based on the customer demand predictions the demand planning is
done thus, ensuring better and accurate customer demand.
3. Distribution Planning: There are a lot of recent changes in the corporate world due to
globalization. The planning for distribution is done to determine which demands can be
fulfilled by the existing supply elements.
4. Manufacturing Planning: The manufacturing division is usually confronted with a lot
of complexities when compared to other divisions. Meeting the demands in terms of
maximization of the assets like people, materials, equipment and capital and planning has
to be done accordingly in terms of planning related to engineering, assemble and the
manufacturing environments. It would help in delivering advanced capabilities that
would help the organization make the best use of the production resources, improve
efficiencies, increase output and lower costs.
5. Production Planning: Under production planning detailed scheduling is done with
proper planning for procurement. The comparison of the capacity requirements from the
production orders with the available production capacity is done through detailed
6. Transportation and logistics planning: The planning is done in terms of route,
management is done in terms of transportation and the planning for the billing and
delivery of the products are done accordingly.
Further the end to end fulfillment would be done giving ways for the benefits
With the adaptability and visibility in the supply chain management there is better
and almost immediate response to the existing and new supply and demand.
Opportunities are more quickly capitalized on.
The level of customer satisfaction is relatively more and hence boosts each and
every aspect of the supply chain management.
Monitoring and tracking of the compliance can be done.
Better planning for procurement, management and transportation can be done
because of relatively lower operational expenditure.
The business relationship gets strengthened more paving way for the achievement
of goals with excellence.