Using SCM, organizations and the supply chain as a whole can improve their long-term performance by systemically and strategically coordinating the traditional business processes that take place within and across companies in the supply chain. In order to complete an order from a client, all parties involved must be part of the supply chain, whether they are directly or indirectly involved. Transporters, warehouses, merchants, and even the end users themselves are all part of the supply chain. An Overview of Supply Chain Management regarding A company’s supply chain contains all of the functions necessary to receive and fulfill a customer’s order. In a typical supply chain, there is a wide range of activities.
Stages of the supply chain
- Distributors and Wholesalers
- Suppliers of raw materials and components
Need For Supply Chain Management
a. Coordinating the flow of materials:
Corporations are progressively sourcing their products from throughout the world. It is now necessary for organizations to find better ways to synchronize the flow of goods into and out of their facilities as supply management has become more globally oriented in recent years.
b. For Faster and on time delivery:
Organizations and distribution networks now compete more for customers’ time and attention to detail. To be successful in today’s market, delivering a defect-free product quickly and reliably than the rivalry is no longer considered as a competitive advantage. Faster, more accurate, and damage-free delivery is expected by customers. As a result, the supplier and distributors must work together more closely.
c. Fast changing technologies and socioeconomic conditions:
The worldwide emphasis and greater performance-based competition, as well as fast changing technologies and socioeconomic conditions, all add to the uncertainty in the market environment.. There is a tremendous deal of unpredictability in the market, which necessitates a lot more freedom on the function of individual enterprises and distribution networks.
So, all of these issues have made Supply Chain Management a more significant topic for businesses.
The Purpose of Supply Chain
Increasing the total value generated by a supply chain is the ultimate goal of all of them. An Overview of Supply Chain Management regarding an organization’s supply chain generates its value by generating more revenue than it spends on fulfilling a client request. When it comes to the sustainability of commercial supply networks in general, the difference between income generated from customers and overall supply chain costs is a strong indicator of value.
Process View of Supply Chain
Supply chain processes within an Overview of Supply Chain Management can be seen in two ways: Cycle Perspective and Push/Pull perspective.
a. Cycle view
A supply chain’s procedures are broken down into cycles, each of which is carried out at the point where two segments of the chain meet. The supply chain process is depicted as a complete cycle.
- Cycle of a customer’s orders
- The resupply cycle
- The production process
- There is a procurement process
b. Pull/Push perspective
There are two types of supply chain processes: those that respond to customer orders and those that anticipate customer orders. In contrast to pull processes, push processes are launched and carried out in advance of customer orders.
Management of the supply chain in a global context
In recent years, there has been a lot of discussion about the expansion of company across borders. Customers’ increasing expectations for better products and services are typically attributed in part to the heat of global competition. Increasing customer expectations have prompted firms to improve their competitiveness through the introduction of JIT as well as QR inventory tracking policies, business reconfiguration, and supply chain managing. Simultaneously, companies are increasingly looking to expand into new markets outside of their own countries, or to find new suppliers in other countries. Several trends show an increased interest in doing business abroad.
An Overview of Supply Chain Management demonstrates that supply chain management difficulties and possibilities in a global environment are becoming increasingly significant as businesses get more involved in the global economy.
Driving Forces of Economic globalization
As if the world’s economy has become increasingly interconnected over recent decades, the nature of competition for businesses has shifted considerably. Determinants for globalization include lower trade tariffs; improved transportation and digital technology; internationalization of products; international trade; increasing competition; and socioeconomic regionalism.
The methods and practices of supply chain management are considered as mechanisms that allow a company to respond to changes in the environment. By collaborating with supply chain partners more closely, a company is better able to anticipate and respond to shifts in customer needs and expectations. Companies are increasingly turning to supply chain management strategies to help them improve their competitive position. Firms may be able to improve their own performance in volatile and competitive global marketplaces by distributing risk across supply chain partners.
Significant Role of Sales Function in SCM
Modern salespeople’s roles have changed drastically, and many traditional models of selling are just outmoded, useless, and detrimental to SCM aims and objectives in many circumstances. In contrast to most sales companies, supply chain partners focus on relationship management and post purchase activities to improve supply chain performance. Functional groups must adapt their old business procedures and better match their current management practices to support and enhance supply chain management when organizations adopt it. Supply chain management.
Use of Personal Selling in Supply Chain Management
Numerous supply chain management actions and behaviors rely heavily on the sales function. A fresh approach to personal selling, better logistical integration, and new supply chain management skills and knowledge are needed by today’s sales force to provide value to the supply chain.
New Roles for Sales Management
Sales managers need to teach, support, and encourage supply chain activities and logistics skills in order to help the sales force in their new supply chain management duties. As a result, in order to improve the efficiency of the supply chain, sales managers must change their perspective and approach. It’s critical that the sales organization’s managers take the role of “Change Agents” and guide the sales team in a new path. Adapting training programs, performance goals, and pay packages to supply chain management is necessary. A supply chain management environment necessitates that companies rethink their sales processes in order to produce value. The sales force’s function will continue to evolve as more companies compete through supply chain management.
Role of Transportation in a Supply Chain
Because items are rarely produced and consumed in the same place, transportation refers to the flow of products from one area to another as they progress through the supply chain. In most supply chains, the cost of transportation is a crucial factor. In global supply chains, transportation plays an even greater significance.
There has been an increase in international trade as a percentage of global economic activity. Transportation plays a critical role in the success of any supply chain. The supply chain also uses responsive transportation to consolidate stocks and operate with fewer facilities.. All four parties involved in a supply chain must be taken into account when looking at transportation. To maximize the return on its transportation assets, a carrier takes investment decisions about transportation equipment (such as trains, trucks, planes, etc.) as well as infrastructure (such as rail). Shipping is used by a shipper to reduce total costs (transportation, inventory, information, sourcing/facilities) while still maintaining an adequate level of responsiveness to the client.
The transportation needs of the supply chain are met by a variety of modes, including aviation, package carrier, lorries, railroads, waterways, tunnels, and intermodal.
Information Technology in Supply Chain Management
The capacity to make strategic decisions rapidly based on reliable data is critical to supply chain management, and this demands an efficient and effective information system. A supply chain is only as strong as the information it has access to. There are no purchase orders, no shipping managers, and no payments if the supply chain does not receive timely information. In order to improve supply chain efficiency and efficacy, the buyer, supplier, and carrier all communicate considerable amounts of information.
The Business Environment
This dynamic, uncertain, and highly cooperative corporate environment necessitates that information be at the heart of everything. Because of the ease with which data may be sent, current business practices could be drastically altered by e-commerce applications and e-enabled capabilities. The primary trends in the business environment include functional integration, time and quality-based competition, and increasing computing power.
The first major trend in Supply Chain Management was functional integration, which had a direct impact on the information systems that were built. Activities like as sourcing, vendor selection, and purchasing in the supply chain must be integrated, as must those in manufacturing, such production planning, scheduling, and packaging. Integration of information technology functions is facilitated by these factors. Reducing related expenses is a major advantage of integrating functional tasks via information technology.
As a second significant business trend, the emphasis on speed to market with a high-quality product is driving the advancement of information systems. It can be characterized as removing wastage of time, efforts, defective products, or inventory from manufacturing distribution systems. Agility and flexibility are two important traits in a fast-paced, high-quality competitive atmosphere. Only companies that are nimble and flexible will be able to thrive in a world of quick product innovation, shorter product life phases, and quick illustrative competition. The ability to adapt swiftly to shifts in the marketing environment is what we mean when we talk about agility. Market low-cost high-quality commodities with short deadlines and variable quantities in an agile way that adds value to customer through customization. When changing conditions are known in advance, adaptability is defined as the potential to rapidly switch between tasks.
Computer power has skyrocketed while being quite affordable, which is a third important trend in the corporate world that has contributed to the proliferation of information systems. Industry procedures for delivering and assisting products will be fundamentally restructured due to the advancement of information technology and the reduction in transaction costs. Organizational structures will become more visible, more strategic alliances will be formed, and a greater focus will be placed on performance evaluation and time-based plans due to advances in information systems.
Supply Chain Information Systems
Management of the supply chain is impossible without the use of information systems. For the supply chain information systems, information is transmitted by either EDI (Electronic Data Interchange) or perhaps the Internet. Implementing supply chain information system is an important first step in managing a supply chain. Effective collaboration, which is enabled and frequently accelerated by information technology, is the foundation of supply chain management.
The application of supply chain management includes the sharing of information amongst supply chain parties via two-way communication. Individual companies in a supply chain must perform information gathering, retention, and use to adopt supply chain management. Real-time transparency of evaluation results across the supply chain is essential for supply chain members.
Direct contact with HP’s customers provides crucial information that helps the company coordinate its supply network back throughout production to product design with other companies.
Advances in technology are making the world smaller and smaller. Customers’ demands are increasing, making businesses increasingly vulnerable to an ever-shifting market. Companies will find that their traditional supply chain management will have to be extended outside the borders of their own company in this uncertain and turbulent climate. An Overview of Supply Chain Management explains that a new paradigm shift is taking place in the 21st century, when firms will need to use IT for strategy formulation instead of aligning it with their existing business plans. Company operations will have to adapt due to new breakthroughs in technologies like the World Wide Web and e-commerce. In addition, the companies must know that they must use the potential of technology to work cooperatively with their business relationships in a new way. Therefore, a company’s fortune can be turned around with an effective IT strategy and supply chain strategy merged into one.