Supply Chain Management Philosophy & Functions

Supply Chain Management Functions

The concept of supply chain management is to overlook and manage the transition of raw goods in to finished products, something that has become necessary over the years as more corporations have become increasingly flexible and dependent on outsourcing the production of their goods to other corporations, who are able to do the job at a more affordable rate.

Supply chain management makes sure that this process is done in an efficient manner, and that the quality of the finished product offered to the consumer is kept in line with that company’s standards.

As a result, more companies are involved in the production of a product, and less managerial control is exercised over logistics operations. Supply chain management ideas were created as a result of an increase in supply chain partners and a decrease in control. Thus, supply chain management works to improve the degree of trust and collaboration among the various companies involved in a supply chain. Supply chain management helps improve the degree of inventory visibility while simultaneously improving the velocity of inventory.

Many different concepts have been suggested for understanding the way material moves from organization to organization. The Supply Chain Management Council, called SCOR, has promoted one supply chain model. The Global Supply Chain Forum put another, the SCM Model, forth. There are basically three different categorical levels of supply chain activities: strategic, tactical, and operational.

Strategic activities involve optimizing networks, which might include addressing the size, location, and amount of distribution centers, facilities, and warehouses where goods are manufactured. It also involves addressing partnership issues among suppliers, customers, and distributors. This means creating strong channels of communication so that important info comes through, as well as improving operations via direct shipping, logistics among third parties, and working with cross docking concepts.

Other strategic duties might include the coordination of product design. This makes sure that new products can be easily integrated in to the supply chain alongside the existing ones, while also managing the various loads.

Strategic SCM duties also might include overlooking the infrastructure of the Information Technology being employed in a company, especially in regards to that company’s supply chain.

Then there are tactical duties that supply chain management must take in to consideration. These might include contract sourcing and other pertinent decisions related to purchasing; making decisions related to production, which might include scheduling, contracting, planning, and more; making decisions related to inventory, such as the quantity, quality, and location of the stock; transportation, including such issues as contracting, the routes and frequency; milestone pavements; and finally, the benchmarking of each aspect of the company’s operations against the competition and the subsequent implementation of the best strategies throughout the business enterprise.

Then there are the operational concerns of supply chain management. These range from looking over the daily production schedules to planning distribution routes for all aspects of the supply chain.