GLOBAL LOGISTICS

Global Logistics



Global Logistics

Introduction

Supply chain management or simply known as supply chain is an important & very crucial department of business. It can be called the bloodline of any firm or organization especially the ones involved in manufacturing of products like textile, mobile phones, fast food or anything that has to do with manufacturing. In ordinary business terms, it is management of successfully converting raw material also known as the input of any business into finished goods also known as the output. The management utilizes a complete set of various processes and procedures to ensure efficient utilization of business's resources in turning the unprocessed materials into finished products. There are 3 layers in Supply chain namely:

Upper layer - comprises of suppliers of various raw materials for a business

Internal stream layer - the actual production process of the manufacturing firm involved in converting raw materials to finished goods

Bottom or Downstream layer - the placement "P" of the marketing strategy responsible for the delivery of finished goods to clients via distribution centers, shops, wholesalers and retailers etc.

Discussion

Supply chain management affects all factors of the shareholder value of a company which includes cost, customer service, productivity and revenues. In addition to the Strategic Planning, Supply Chain Management is the most popular methods for several operations of firms. Nowadays, companies share the various tasks in the value chain, and around the globe. Despite huge tracks that cover the partial products, the companies jointly produce more and cheaper than a company that does the job alone. This happens because the dependence of firms rises with each other and due to the need for ever closer cooperation and more intensive exchange of information. The extreme strategic importance of supply chain management for the competitiveness of businesses is evident in all sectors. At the same time, the gap between the average companies and leading companies such as Wal-Mart, Toyota, and Tesco becomes greater with the passage of time. The best are getting better and faster in almost all industries (Chambers, 2009, 449).

The five SCM components

Plan

This is the strategic segment of supply chain management. Strategies and business plans are made in order to carry out the remaining stages efficiently. Strategies are devised by the supply chain managers of the company devising best policies and strategies for the business.

Source

The next component is the selection of suppliers who will supply the goods and services, required to produce a good or service. Build up a set of pricing, delivery and payment procedures with suppliers and generate metrics for checking and improving the terms and relations with the suppliers. Further, one needs to design procedures for managing the inventory of goods and services he receives from suppliers, including receiving shipments, their verification, transference to the manufacturing facilities and approving payments of the suppliers (Disney, 2002, 157).

Make

This is the manufacturing step. One needs to plan the activities that are essential for manufacturing, testing, packaging and preparation for delivery. It is the most metric-intensive segment of the supply chain that measures quality ...