As global competition and advancing technology render borders irrelevant and link companies more closely, supply chains (the network of suppliers, plants, distributors, retailers and others that participate in the sale, delivery and production of goods and service) are growing increasingly complex.
What is Supply Chain Management?
It is the overseeing of materials, information, and finances as they move from supplier to consumer. It is improving the way your company finds raw components, manufactures/produces that product or service, and delivers it to customers. The following are five basic components for supply chain management. The five basic components for supply chain management.
Plan: The strategic portion of supply chain management. A strategy for managing all the resources that goes toward meeting customer demand for your product or service.
Source: Choose the suppliers that will deliver the goods and services you need to create your product or service. Develop a set of pricing, delivery and payment processes with suppliers and create metrics for monitoring and improving the relationships. And put together processes for managing the inventory of goods and services you receive from suppliers.
Make: The manufacturing step. Schedule the activities necessary for production, testing, packaging and preparation for delivery. As the most metric-intensive portion of the supply chain, measure quality levels, production output and worker productivity.
Deliver: The "logistics” portion of SCM. Coordinate the receipt of orders from customers, develop a network of warehouses, pick carriers to get products to customers and set up an invoicing system to receive payments.
Return: The problem part of the supply chain. Create a network for receiving defective and excess products back from customers and supporting customers who have problems with delivered products.
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