A supply chain consists of three types of entities: customers, a producer, and the producer's suppliers. The following are the vital links of supply chain and these links are so important for running a successful business.

Forecasting

Through forecasting, businesses is getting the opportunity to build action plans that will enable them to provide the required level of customer service as well as managing inventory levels and operations plans that optimize costs.

Each business should find out what levels of forecast are truly useful to the business and focus on improving those areas.

Planned and scheduled review and revision of the forecast to include new information about the market changes is vital and will help to initiate future action.

Planning

Based on the forecasting, Marketing should present various customers needs and their speculations with internal departments and ensure planning is done well to satisfy every customer. This exercise should be carried out on a continuous and regular basis based on the nature of industry. Planning controllers should discuss with materials and manufacturing to ensure meeting customer targets. Plenty of models are available such as ERP and other software for effective implementation.

Supply management.(Materials)

This is a very key function. Liaison between the supplier community and the manufacturing of your own organization is very important. Organization will be benefited only by delivery on time and optimized inventory. Area to be focused is zero defect from suppliers and continuous cost focus and global sourcing.

Manufacturing

Manufacturing industries phasing away with previous batch manufacturing, cell manufacturing etc. Lean manufacturing helps them in achieving their current and
future targets with cost and quality benefits. It is also taking the responsibility of future investment and equipments to achieve competitive goals and are striving to achieve TPM and other techniques. Ensuring inventory optimization at all levels.

Warehousing and Logistics.

This link is very important to ensure on time delivery to customers. Companies do have warehousing nearer to the customers. Proper in bound and out bound logistics also helps in cost reduction.

Individual key links has its own system driven activities, this article has only highlights important of each function.

SCM has three basic principles, namely

1)Product value has to be defined from the customers point of view, and not companies .Make products what customer want, deliver the product when they need, do not over or under produce, ensure zero defect.

2)Supply chain flow should be continuous one along with information. Product should be pulled by the customer not pushed by the company. Supply chain process should be clearly understood the demand destination of the end product and the cycle.

3)Entire organization needs perfection, ensure waste elimination at all levels and should know their supply chain journey for success.


Most of market leaders and global companies have started using SCM, however average companies are yet to start applying SCM. A critical survey of SCM specialist indicates Automotive, Aerospace and defense organizations are already in the process of examining their supply chain improvements as they
are aware the need to reduce order to delivery lead time. Why not other industries and SME’s get the benifit?

L.N.Raghavan
Consultant.

Supply chain managers decide where to locate manufacturing and distribution facilities, how to route goods and materials among those facilities.

Mr. Lakshminarasimhan Raghavan

(Tradeindia Expert)

Freelance

Consultant, Freelance
Chennai, India