In business, supply chain management, also known as logistics management, encompasses the movement and storage of goods, between places and companies, and involves the movement and delivery of finished goods, materials, and even energy from point of production to point of sale. Supply chain management service is a term that encompasses a wide range of processes, from production, through material transport, to logistics and delivery. The various stages of supply chain management are:
Aspects of supply chain management
Planning is one of the most important aspects of supply chain management. It is where all the activities in the supply chain are planned out. This includes strategic planning, identifying bottlenecks and finding ways to improve efficiency, and lastly, implementation of methods and systems to improve quality and cut costs. Strategic planning includes identifying the roles and responsibilities of all employees in your organization, which should include human resources, production, sales, distribution, waste management, finance, marketing, advertising, and customer service.
Planning involves identifying and defining your customer, your competitors, as well as the market. It also involves identifying your product or service, developing and implementing a marketing strategy, determining your manufacturing capacity, setting up your financial management, determining your customer’s preferences, setting up your production process and technology, etc. In supply chain management, you set up your processes for delivering your product to your customer. Among the processes, you will set up are inventory control and logistics management, including lead times, replenishment, manufacturing, material management, and customer service.
Deals with the movement
Logistics management deals with the movement, storage, and delivery of raw materials to the final production site. Among the components of logistics management are transportation, material handling, and construction. Transportation is the transport of materials between the source and the final processing facility. Material handling is the transportation of goods from the source to the point where they are loaded on hand and stored. Meanwhile, construction relates to the improvement of a manufacturing process, for instance, increasing the efficiency of manufacturing processes by the use of machinery.
Supply chain management and strategic planning
With supply chain management and strategic planning, you are able to foresee customer demand. You can anticipate consumer demand because you know how much and when to produce. For example, if you know that the holiday season is coming. You will make sure that you have enough stocks of holiday decorations and accessories. Strategic planning also enables you to provide the products your consumers want. You can tailor the product offerings to meet consumer demand.
Global supply chains
One of the problems with global supply chains is that there is less room for the supply chain to accommodate sudden changes in consumer demand. Because of fast-paced economic growth. Businesses need to make decisions quickly to respond to the sudden change in consumer demand. If you do not foresee the sudden rise in consumer demand. Then you will be left with no room to respond to the demand. In such cases, you end up overproducing and that will lead to oversupply and lower profits.
Challenge for logistics managers
Another challenge for logistics managers is establishing proper long-term strategies for inventory control and distribution. Sometimes, it becomes impossible to determine what the correct strategy should be based on historical data. This is because new product development can sometimes lead to an unexpected shift in the existing inventory. Proper logistics management software can help determine the correct. Long-term strategy by tracking historical data and determining which strategies are suitable for new product development.
In addition
Inventory planning is another processing element that has a major impact on supply chain management. Proper inventory planning helps determine when to place an order with a supplier and when to stop placing orders. This helps the logistics manager determine the correct time to place orders for goods that are no longer in production. Planning can also determine whether to order supplies in bulk or to purchase supplies in small quantities through packaging logistics service. This leads to cost savings as well as improved profitability.