Know More About Supply Chain Management
|Date Added: May 30, 2012 01:33:37 AM|
|Category: Business: Storage|
Manufacturing a product and delivering it to the hands of a customer, is a long, complex process. Several steps are taken during the manufacture, delivery, and sale of a specific product. A network or chain binds retail, transport, distribution, and supply. Not only has these but included organizations, individuals, resources, technology etc. This chain or network is known as Supply chain in the business world.
Supply chain is actually a series of certain activities. . The activities will take into fold raw materials and other resources and in the end; a finished product will come out. That product is then sent to the market for the customers to buy it. Supply chain is like the backbone of any business. Spread of business activities due to globalization and increased competition has made companies pay attention to Supply chain management. The term gained prominence first in 1982. If the chain breaks down somehow, the entire functioning of a firm will be hampered.
Supply chain management addresses certain areas of business.
Distribution Network: Details of suppliers, production center, distribution points, storage facilities, and customers.
Distributing process- After details of the distribution network is collected, the focus shifts towards determining the best possible ways to complete distribution. Whether distribution will be centrally controlled or decentralized is decided. The distribution scheme (direct shipment, cross docking, direct store delivery etc.), mode of transport (railroad, road ways, airways or waterway) and control of transport (Private carrier, common carrier) are also decided.
Inventory: Details of inventories including raw materials, finished products, are gathered. The main aim here is knowing how much and where they are.
Information: Sharing of valuable business information, such as business forecasts, transportation, inventory, possible partnerships etc.
Payment: Processing payment terms and determining methods for exchange of funds between parties across the Supply chain.
On the other hand, managing Supply chains properly will give certain advantages to an organization.
• You will have a better understanding of Supply chain and its related network. It will be possible to take advantage of new opportunities.
• You will become aware of customer demands. This in turn helps to fulfill them. You will be able to maintain communication with customers and get feedbacks from them.
• It will be easy to track how various areas of the business are functioning.
• Unnecessary costs can be avoided. Efficient planning will help in resource managing, production and transportation.
• A strong relation with trading partners will strengthen the foundation of your business and open up new opportunities. It will be easier to achieve goals and objectives of the company.
• Customers will be served better. This will increase the good reputation of your company.
• Smooth manufacturing or production will increase the quality of the product.
Markets are now not restricted by geographical boundaries. A company’s market can be spread across continents. Over the decades, people have learned the importance of Supply chain. It is very easy to find products that are made in foreign countries, in your neighborhood store. It is only possible because of a strong Supply chain.