Supply Chain Management
There are many aspects of business today. The most important and most expensive is not manufacturing and production cost. Today the most expensive aspects of any product is getting the product to the consumer and make sure that at all time the customer can purchase the product without delay. To consider the fact the forty five percent of purchases that are not necessary but spontaneous; those product must be seen and readily available to purchase. Even the ones that are necessary must be seen and ready for purchase or it may result in a poor overview of the company and may result in the loss of consumer support. To make sure that this does not a cure a company ...view middle of the document...
” A definition of Supply Chain Management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption. Supply Chain Management not only is concerned with the product but of information and money. Another definition is provided by the APICS Dictionary when it defines SCM as the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally."
There are six key elements to a supply chain. These six key elements should be designed around the product that is being delivered to the consumer. If the company is producing cars there would be a different supply chain then producing computers, cereal, hospital equipment, or software. Each product relates to a different consumer but ultimately should have the same structure in a supply chain. The six key elements are production, supply, inventory, location, transportation and most important information. Customer satisfaction is very important. To achieve this, you must not only have a product that people are willing to purchase but have a product that is there when they need it.
Production decisions focus on what customers want and the market demands. This first stage in developing supply chain agility takes into consideration what and how many products to produce, and what, if any, parts or components should be produced at which plants or outsourced to capable suppliers. These decisions regarding production must also focus on capacity, quality and volume with the understanding that customer demand and satisfaction are to be reached
To meet supply and demand a company must determine what their facility or facilities are able to produce, both economically and efficiently, while keeping the quality high. Unfortunately companies cannot manufacture of all components or in some cases are just an assembly plant and receive all components in to produce a product. In retrospect outsourcing is to be considered for those products and components that cannot be produced effectively by an organization. Companies must carefully select suppliers for raw materials. When choosing a supplier, focus should be quality and flexibility while at the same time reducing costs or maintaining low cost levels. In the area of supply, decisions should be made to determine the core capabilities of a facility and if needed outsourcing partnerships.
In today’s market place a growing realization is with inventory and the cost in which to keep product on hand at certain level to meet customer demand inventory and how much product should be in-stock. A delicate balance exists between...