What is supply chain management?
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 plain 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 raw materials into finished products. There are 3 layers in Supply chain namely:
i. Upper layer - comprises of suppliers of various raw materials for a business
ii. Internal stream layer - the actual production process of the manufacturing firm involved in converting raw materials to finished goods
iii. 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.
There are 5 different stages in supply chain management:
i. Plan - 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.
ii. Develop - Strong relationships and business terms are developed with the suppliers for long term relationship. Various suppliers are assessed upon many factors, price, quality, timely delivery and ability to deliver in bulk quantities.
iii. Make - The product finally gets to the manufacturing process to be made according to high quality standards and specifications conforming business standards.
iv. Deliver - The product is finally delivered to the client either on order or in batches. These products are made and delivered upon the highest standards of quality control and planning making client happy regarding the product.
v. Return - Client/customer would return the good or product back to the company if it fails to meet certain quality control criteria. The origination gets in touch with the customer to record and keep a track of his/her complaints so that the company's SCM and Complaint center department together deals with the issue and get it sorted out as quickly as possible. Guarantees and product warranties are then sued by the customer to either regain a new product or get the existing one repaired free of cost.
The above 5 stages might seem smooth to handle but take consistent dose of time, effort and planning in order to get the business running. This entire 5 stage process involves a lot of planning, execution and regular monitoring of the production process in order to get high quality finished goods to the customer/client.
What is the importance of supply chain?
Supply chain management is categorized as a set of business rules or principles to consistently monitor the production process of the company by ensuring regular supplies of high quality raw material in timely manner to be converted into finished goods. In order to make this process as success, a separate business department of business is assigned that is known as the supply chain management. This department works just like other departments of the business but has everything to do related with the production department of the business.
In today's rapid and dynamically changing world, ensuring regular supplies to meet consistent fluctuations in consumer demands has been defined as one of the most crucial aspects of any business if it wants to be successful enough to compete in terms of quality, price and competitors. For companies involved in the manufacturing sector SCM is the most important business department and in fact has been termed as a necessity to regulate the supply chain aspects of the business smoothly and efficiently. Nowadays business need not only lower costs in order to stay ahead in the ocean of cut throat competition, they also need to develop uniquely devised built-in competitive edges in order to be successful. Today only those businesses are successful that makes competitive policies in timely manner in accordance with the highly volatile consumer market.
The importance of supply chain is valued very high that the Japanese auto giant Toyota had been consistently applying regular set of SCM policies in order to take over the completion by maximum utilization of its resources. As a result the company has efficiently been able to beat FM and Ford of the USA. Various advantages exist of supply chain that makes it an important aspect of any business
1. Value added concept - SCM has been successfully able to add value to the production process by minimizing the production time in order to incorporate creativity and innovation to produce better products in the long run.
2. Increased profitability - Efficient use of SCM polices results in lowered costs and rising profits. Big costs in terms of supplies are time and the price of raw materials. In order to save on finance, the company would have long term business relationships with its most valuable suppliers that would supply high quality bulk raw materials on time to the company so that the company can produce different products. This results in saving of time and costs by not hiring different suppliers on the daily basis.
3. Adjustment in trends - Companies involved in the fashion industry like cosmetics, perfumes, textile, garments etc are subject to high fluctuations in seasonal demands of products. As seasons change so do people's preference of cosmetics and fabric changes. As a result supply chain has to effectively plain well ahead in time for the upcoming trends to get the manufacturing process adjusted. This can be achieved by clearing out stock on sales of previous items and going in quick manufacturing of new fabric to adjust to the new seasons.
4. Time saving - Efficient use of SCM results in big savings on time so that the customer gets only the type of products that he/she wants.
Want to know what is supply chain management and how it will help your business efficiency? Talk to Alenu IT Solutions today!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 plain 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 raw materials into finished products. There are 3 layers in Supply chain namely:
i. Upper layer - comprises of suppliers of various raw materials for a business
ii. Internal stream layer - the actual production process of the manufacturing firm involved in converting raw materials to finished goods
iii. 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.
There are 5 different stages in supply chain management:
i. Plan - 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.
ii. Develop - Strong relationships and business terms are developed with the suppliers for long term relationship. Various suppliers are assessed upon many factors, price, quality, timely delivery and ability to deliver in bulk quantities.
iii. Make - The product finally gets to the manufacturing process to be made according to high quality standards and specifications conforming business standards.
iv. Deliver - The product is finally delivered to the client either on order or in batches. These products are made and delivered upon the highest standards of quality control and planning making client happy regarding the product.
v. Return - Client/customer would return the good or product back to the company if it fails to meet certain quality control criteria. The origination gets in touch with the customer to record and keep a track of his/her complaints so that the company's SCM and Complaint center department together deals with the issue and get it sorted out as quickly as possible. Guarantees and product warranties are then sued by the customer to either regain a new product or get the existing one repaired free of cost.
The above 5 stages might seem smooth to handle but take consistent dose of time, effort and planning in order to get the business running. This entire 5 stage process involves a lot of planning, execution and regular monitoring of the production process in order to get high quality finished goods to the customer/client.
What is the importance of supply chain?
Supply chain management is categorized as a set of business rules or principles to consistently monitor the production process of the company by ensuring regular supplies of high quality raw material in timely manner to be converted into finished goods. In order to make this process as success, a separate business department of business is assigned that is known as the supply chain management. This department works just like other departments of the business but has everything to do related with the production department of the business.
In today's rapid and dynamically changing world, ensuring regular supplies to meet consistent fluctuations in consumer demands has been defined as one of the most crucial aspects of any business if it wants to be successful enough to compete in terms of quality, price and competitors. For companies involved in the manufacturing sector SCM is the most important business department and in fact has been termed as a necessity to regulate the supply chain aspects of the business smoothly and efficiently. Nowadays business need not only lower costs in order to stay ahead in the ocean of cut throat competition, they also need to develop uniquely devised built-in competitive edges in order to be successful. Today only those businesses are successful that makes competitive policies in timely manner in accordance with the highly volatile consumer market.
The importance of supply chain is valued very high that the Japanese auto giant Toyota had been consistently applying regular set of SCM policies in order to take over the completion by maximum utilization of its resources. As a result the company has efficiently been able to beat FM and Ford of the USA. Various advantages exist of supply chain that makes it an important aspect of any business
1. Value added concept - SCM has been successfully able to add value to the production process by minimizing the production time in order to incorporate creativity and innovation to produce better products in the long run.
2. Increased profitability - Efficient use of SCM polices results in lowered costs and rising profits. Big costs in terms of supplies are time and the price of raw materials. In order to save on finance, the company would have long term business relationships with its most valuable suppliers that would supply high quality bulk raw materials on time to the company so that the company can produce different products. This results in saving of time and costs by not hiring different suppliers on the daily basis.
3. Adjustment in trends - Companies involved in the fashion industry like cosmetics, perfumes, textile, garments etc are subject to high fluctuations in seasonal demands of products. As seasons change so do people's preference of cosmetics and fabric changes. As a result supply chain has to effectively plain well ahead in time for the upcoming trends to get the manufacturing process adjusted. This can be achieved by clearing out stock on sales of previous items and going in quick manufacturing of new fabric to adjust to the new seasons.
4. Time saving - Efficient use of SCM results in big savings on time so that the customer gets only the type of products that he/she wants.
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