Supply Chain Management
Supply chain management (SCM) covers the full cycle of making a product and providing the finished product or service to your customers. This process creates a chain between sourcing raw material from vendors, assembling the components, dispatching them to customers and further feedback from the field.
The cycle of supply chain management integrates five distinct chains:
- Plan: This sets the strategy for managing resources to make it cost effective, including metrics.
- Source: This identifies vendors who meet the criteria for on-time deliveries while complying with the norms for quality and cost. This includes all aspects from logistics, to the point of delivery to the factory premises.
- Make: This creates and implements the schedule of all of the tasks that are required to manufacture the components, packs and delivers while maintaining the norms of productivity and cost.
- Deliver: This covers the overall marketing and logistics plan of delivery to the identified warehouses, dealer networks, invoice generation and payables.
- Return: This creates the flow to receive defective/excess/wrong part numbers so that they can be redirected or reworked.
The SCM is information and data driven. The quality and integrity of the input data will directly determine how effective it works. Therefore if you put junk into the system, you will get junk as an output. So although the system uses computer software to help run it, you need to make sure that you have qualified employees that are entering the right types of data into it. This means that your employees have to continuously evaluate their processes and outside information to make sure that your customer and company needs are being fulfilled.
Most companies have their own unique way of doing things so the types of industrial software that you use will depend greatly on the type of operation that you are running. It’s important that you have a well managed and hard working supply chain team to operate an organized and cost efficient business. SCM can also be integrated with ERP software systems to make it even more effective.