What is Supply Chain ?

The supply chain is the process by which an organization produces 1 product from raw materials supplied by different companies and then, sold to customers. Depending on the size of the organization and the number of products produced, that supply chain can become complex or simple.

What is supply chain management?

Supply chain management is the management of a CONNECTIVE NETWORK of businesses involved in the supply of goods and services to consumers. It requires many different processes, including: Storage, material transport & inventory handling & manufacturing & storage, transporting complete goods from production to consumption …

To gain an overview of Supply Chain Management, we will go through three main issues: Different links in the Supply Chain, Levels of Supply Chain and Technology in Supply Chain Management.

Various links in the Supply Chain

Customer

The beginning of the supply chain is the customer. The customer will decide to buy 1 product and contact the company’s Sales department. Orders will be completed with information on: Product, quantity and delivery date.

Planning

After receiving the order, the Planning Department will produce a production plan to produce according to customer needs. At this stage, Planning Department will know the materials needed to meet customer needs.

Purchasing

If material is required, the Purchasing Department is notified and they will send the order to the supplier for the delivery of a given quantity of materials on the requested date.

Inventory
When materials are delivered by the supplier, they are checked for quality and quantity. After that, it will be stored until required by the Production department.
Production
Raw materials will be moved to the production area, based on the production plan and production progress begins. Finished products will be checked & moved into warehouse. Storage time will depend on the date of delivery from the customer.
Transportation
When the finished product is stored in the warehouse, the delivery or shipping department will decide when the product leaves the warehouse and is delivered to the customer.

Levels in the Supply Chain

There are 3 levels in supply chain management, in which, different departments of an organization focus on supporting and helping the supply chain run smoothly, including:
Strategic
At this level, senior management will determine the size and location of the factories, the cooperation strategy with the suppliers and the types of products manufactured and marketed.
Tactical
Management will decide how to operate the supply chain at the lowest cost. Typically: Create a purchase plan with suppliers and work with shipping companies to achieve optimal efficiency in terms of cost when transporting goods.
Operational
This is the level at which decisions about day-to-day operations impacting the supply chain will be made. For example: Receiving orders and transporting goods from the warehouse to the point of sale.

Technology in Supply Chain Management

To optimize the benefits of supply chain management processes & processes, businesses need to invest in technology, for example:

– Enterprise Resource Planning (ERP): This system helps businesses optimize their operations by: unifying the data of all departments on one database. The most common data is to minimize time and ensure a flow of information is used throughout the enterprise.

– Tracking and transporting goods based on computerized applications (Computerized Shipping & Tracking): The support of modern technology and basic IP computing software helps businesses (DHL, FedEx, ..) Simplify the supply chain, minimize time and errors occurring during transportation.

– Technology to identify objects by radio waves (RFID – Radio Frequency Identification):RFID chips will be mounted on each product and allow businesses to easily track inventory, control and improve visibility of their products. This also eliminates the possibility of errors, simplifies the supply chain and reduces operating costs.

Resources

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