Supply management is a critical element in understanding business operations. Supply Chain Management (SCM) is the oversight of finances, materials, and information when the movement happens from supplier to manufacturer, wholesalers, and retailers and at last reach to customers via defined procedures. Here, we will discuss all the processes among companies and within a company through the supply chain.
Supply Chain Management Flow Chart
Product flow, information flow, and finances flow are the three main flows associated with supply chain management. Check the flow diagram of the supply chain given below that describes the different stages of supply chain management.
Stages of Supply Chain Management
Product Flow – The movement of goods from the supplier to the consumer and returns and other service requirements.
Information Flow – Transferring orders and updating the state of delivery.
Finances Flow – Incorporates payment schedules, consignment, credit terms, and also title deed arrangements.
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Well, companies use online platforms or SCM software for the management of the supply chain. They can customize online tools or software according to their needs. Furthermore, SCM software systems are available in two types. In addition, some software can be used both inside and outside of the company. Upstream information can be shared with suppliers, and downstream data can be shared with clients. It helps to increase cost-efficiency, improve time for marketing, and better management of resources. SCM is useful for managing resources and finance to generate more revenue as supply chain management functions are convenient. SCM is used for particular tasks like:
Improve overall efficiency
Reduce costs and generate more revenue
Better services for customers
Value chain optimization
The transformation process is the method of converting resources into services or products that consumers will buy. Well, industries need resources to trade.
Importance of Supply Chain Management in Organization
Supply chain management is not only about supply, but it also involves the primary stage of the process of product demands to product delivery and customer satisfaction. SCM includes:
Control of supply and demand
Sourcing and raw materials
Manufacture and assembling products
Warehousing and stock management
Distribution through multiple channels
Delivery of services or products
Production and Operations Management (POM) Under SCM
The production information supply chain includes many methods in different stages. The whole process of production is divided into different stages. Let us understand the different types of production methods in supply chain flow management.
A job or task is done by a single person or a group or people (workers). Such a job can be complicated or small-scale, and it may involve low or high technology. In the job method, certain features are maintained to get the job completed successfully. The features are as follows.
Define Objectives: Clearly states the stages, dates, and milestones
Decision-making Process: Decision of tasks, labour, and resources.
Low Technology Jobs: Technology and skills are needed for low-technology jobs hence workforce is readily available. In this process, the purpose of the specific requirements of customers is fulfilled like hairdressers and tailors.
High Technology Jobs: Some jobs are complex and hence, require high-end technology and skilled management. Such jobs include better project control and management, like film productions and building construction projects.
In the bulk production of products, companies usually prefer the batch method. They will produce end-products in batches. The batch method involves task division and sub-parts of operations. Labourers are trained to complete specific processes, and resource management is essential to ensure the proper production equipment. Two features are imperative: Maximum utilization of equipment and skilled labour or workers. Most of the manufacturing companies adapt the batch method for bulk production.
However, the batch method has some problems, especially when there is a lack of technology and skilled labourers. It is essential to manage the flow of working on completing batches one after another. The flow method eliminates problems of the batch method and ensures the continuous progress of materials and processes. The goals of the flow method are as follows.
Better materials’ flow
The lesser need for specific labour skills
Quick and timely completion of the task
The flow method involves quick completion of different stages of production. As soon as one particular task is completed, the next step will be initiated without any delay.
Requirements for Flow Methods to Work Well
Demand should be regular. If the market is unpredictable or irregular, the flow method ends up with only stock production. In such conditions, problems of storage and stock management will be raised. The flow method works well in standard products; if products vary, you can not get it done by the flow method. Continuous progress needs a constant supply of materials and resources. The entire process should be divided into several stages.
Question 1: Define the Objectives of Supply Chain Management (SCM).
Answer: Supply chain management is essential for any organization or company. It helps to get higher revenue in low-cost investment in the marketing and manufacturing of products. SCM incorporates many stages and objectives for the betterment of timely productions on customer demand. It also involves the prediction of the future need to avoid loss in stock management. SCM provides higher efficiency, enhanced agility, and flexibility. In addition, it increases the satisfaction level of customers by setting up higher standards. It also optimizes the value chain.
Question 2: How SCM is Important for Any Business?
Answer: From the production to the delivery of services or products should be maintained flawlessly to complete the entire process and fulfill the requirements of demands in the market. Supply chain management solves this purpose and also includes sufficient efforts about production to delivery. In addition, the different processes like demand prediction, stock management, resource management, and (delivery methods) logistics methods are also involved in supply chain management. SCM is crucial for customer satisfaction and the success of the company. SCM knowledge should be leveraged to support medical missions.