It gives smoothed execution to all tasks in order to achieve long-term profitability in a solid way. Most of the time supply chain management flows is divided into 3 basic flows that are:
Tuesday, March 4, Untangling the Supply Chains: Manufacturing At a high level, supply chains address the same needs for all companies, managing the flow of goods and services in an optimal fashion.
However the core supply chain competencies change based on the industry vertical. Here is a quick summary of such competencies for retail and manufacturing environments.
For Retail, the primary investment is in the merchandise flowing through its network, at rest or in motion. We exclude any real estate assets from this discussion as these are not core to supply chain operations.
Whether a retail company owns the stores, or leases them, does not impact its operations substantially. That is why the Retail supply chains are distribution focused.
After the cost of merchandise, the largest overheads in retail are related to their stocking and distribution of goods. A lean distribution chain means optimal services levels between the supplying and consuming network nodes and a higher inventory turns. The level of inventory directly affects the operational cash-flow and ability to service customers — and both these competing needs must be managed effectively.
All equipment gets depreciated over time irrespective of the percentage utilization. Therefore manufacturers must worry about maintaining optimal levels of inventory to maintain the services levels among the supplying and consuming network nodes but also about keeping the equipment and resources effectively utilized.
In doing so the focus of the supply chain changes considerably from being distribution focused to being asset focused though the relative importance of asset utilization over optimal inventory management will be determined by the cost of raw material to finished goods ratio that represents the value added.
This introduces the need for manufacturing planning, scheduling and sequencing so that all manufacturing operations as well as transportation operations are optimally planned for best use of resources.
Size of the Network: Another difference that accentuates the different core requirements for the Retail and Manufacturing supply chains is simply the size of the network.
A manufacturer on the other hand will normally have only a handful of manufacturing locations and warehouses. Therefore managing the flow of material merchandise, raw materials, or finished goods through this network through optimal transportation, and warehouse planning becomes much more important in a retail environment.
Also the sheer number of items dealt within the Retail environments is huge compared to most Manufacturing environments exceptions exist. This adds a large number of vendor shipping locations to the network making it unwieldy and complex for retailers.
These nodes represent different activities in the supply chain, and therefore present different planning challenges. While the Retail chains typically emphasize managing inventory and service levels, the Manufacturing chains also manage resource planning and usage.
This also affects the service-time length of supply chains. Manufacturing supply chains usually have longer end-to-end lead times due to manufacturing process lead times and therefore inherently less flexible to volatility.
Retail chains can be nimble if managed and modeled well though the size of these chains tends to make them harder to optimize. In a Retail chain, the capacity constraints are seldom modeled. Most of the capacity can be modeled as infinite as this capacity is mostly an outsourced service.
Relevant capacities in Retail that can potentially constrain the supply planning are the supplier capacities, stocking capacities and transportation capacities. As most retailers have multiple suppliers and merchandise that can be easily substituted, the supplier capacities can be considered unconstrained.
Same goes for the transportation capacities, as more carriers can be added on routes where required. That leaves the warehousing storage constraints as the only real constraint, but even these are seldom modeled in Retail chains.
In contrast, the Manufacturing chains are constrained by manufacturing capacity available resources, time, skills, etc.
As a result, the Retail supply planning primarily consists of propagating demand through the supply chain tiers largely unconstrained, with only the inventory levels and inventory multiples having been modeled.
The latter adequately address the need to maintain the desired service levels. In both environments, collaboration with partners can become a true differentiator. However it can provide a substantially higher return in Retail environments than in most manufacturing environments.2. Flexibility.
One of the most important benefits of an integrated supply chain is increased flexibility. Houston Chronicle contributor Chirantan Basu noted that by integrating all of a business’s functions, flexibility can be achieved.
“Tight supply chain integration gives management operational flexibility to respond rapidly to external events, such as the actions of competitors and. Supply chain management systems can help your company determine the best way to ship your products, while also reducing your costs at the same time.
Advantage #4: Mitigate Your Risks As a business owner, you face risks everyday. Your business can increase profits without increasing sales. You do this by reducing your supply costs. This can include the supplies themselves and the cost of shipping, storing and retrieving them.
In today's competitive arena of business there is nothing more important than setting yourself apart from the crowd. Growing, learning, and interacting with business professionals, university faculty, and most importantly students just like yourself is the key to building your network.
from day one.. The SCMA provides you with the opportunities and experiences to jump start your college career. Suppliers and manufacturers within the supply chain synchronize their demand projections under a collaborative planning, forecasting and replenishment scheme, and every link in the chain is connected through technology that includes a central database, store-level point-of-sale systems, and a .
In , Supply Chain Management Review published one article called “The Seven Principles of Supply Chain Management” written by David Anderson, Frank Britt and Donavon Favre.
At that time, Supply Chain Management (SCM) was a pretty new term so this article did the excellent job to explain important supply chain management principles in one shot.