SUPPLY CHAIN MANAGEMENT

Supply Chain Management

Supply Chain Management

Introduction

Sometimes companies wonder if they are putting in as much efforts as its competitor, although is the market leader but still the competitor is offering good products or maintaining a low price and earning more profit. In this case it is mandatory to assess the performance of the operations in supply chain and seek improvements. As it is said that companies do not compete, but their supply chains compete. It is imperative for a company to measure the performance of its supply chain and bring improvements across the extended supply chain in meeting the end-customer requirements.

The supply chain management is an important business strategy for the companies that not only improve the efficiency of the organization if working appropriately but it also devalues the organization if it is not working properly. To win in present competitive environment supply chains require continuous improvements and hence are prime indicators for a performance measurement.

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.

SCM Components

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.

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 levels, production output and worker productivity.

Deliver

This is the component that many insiders refer to as "logistics." This part includes the coordination of the receipts of orders from customers, development of a network of storehouses, picking up of carriers to take goods to customers and setting up of an invoicing system to receive payments.

Return

Client/customer would return the good or product back to the company if it fails to meet certain quality control ...