In business, supply chain management refers to the entire process of the movement and storage of goods, both from points of origin and destinations, through to the satisfaction of customer requirements. It includes not only the movement of goods but also the storage and the warehousing of these goods until they are ready for dispatch or shipment. The term is also used to refer to a group of activities that help ensure the smooth functioning of the supply chain Management.
Objective
The primary objective of supply chain management is to ensure the efficient movement of materials and products through the supply chain from suppliers to buyers and manufacturers. In business this translates to the efficient supply of goods in terms of their availability, cost effectiveness, and quality. It is essential to meet demand and competition in markets and for this purpose, companies have to adopt strategies that reduce the cost and the time required for moving goods. One such measure taken by many companies involves the use of suppliers who can meet demand and provide quality products at competitive prices. Companies also look to other sources of suppliers of similar products who can meet the supply chain needs at lower costs.
Movement
Supply chain management requires efficient movement of goods and finished goods from point of sourcing, through manufacturing and final retail destinations, to meet demand and competitive price. The movement of goods should be made in an orderly fashion with appropriate spacing between the source, manufacturer, and retailer. Supply chain should include air freight and shipping services. While air freight provides fast and secure transport of bulk cargo, it may be relatively costly depending on the distance, size, and weight of the goods.
Online shopping
The supply chain management of factory inventory has evolved as online shopping has become a way of life. Many companies today use the web to sell their products and to determine their stock levels. As a result, supply chain management has adjusted prices and production schedules to match the changing demands of online customers. Online retailers such as Walmart use a blockchain or distributed ledger system to determine what products to sell, when to sell them, and how much to sell them to maximize profits.
The supply chain management of factory inventory follows the same principles used by logistics for customer orders. Inventory is received by the factory and moved to the receiving offices. The receiving offices then forward the inventory to the warehouse. In the case of Walmart, this inventory is received by a store management system that processes Wal-Mart’s customer orders. This system then sends orders received from the warehouse to stores located in various locations throughout the world.
Warehouse
Once the inventory reaches the warehouse, it is inspected for quality and quantity, then placed on pallet racks. When a product arrives at the warehouse, it is loaded into trucks, which transport the merchandise to the distribution points, where the products are loaded into trucks that transport the merchandise to the end users. The distribution points include retail stores, where the product is displayed, or display rooms, where the product is delivered to customers. In supply chain management, quality and quantity control processes are used for both product delivery and distribution.
Elements of Supply Chain
Although the supply chain contains three elements, it is complicated and difficult for many people to understand. Supply chain management systems, such as the manufacturing, warehousing, and distribution stages, are designed for smooth operations and are supervised by several people, including supervisors, managers, and quality representatives. Supervisors manage employees within each of these stages and perform various functions, such as sourcing raw materials and suppliers, receiving and shipping orders, and keeping track of all raw materials and finished goods. Managers monitor the progress of suppliers and their raw materials to ensure that sufficient quantities are received and that nothing is sent out that could cause damage to the company or slow down its production.
Distribution
Distribution involves moving finished goods from the production plants to retailers and from retailers to end users. It also involves delivering goods to a customer and collecting payment and other services such as packing and delivery. Delivery, on the other hand, refers to the time taken to transport the goods to the final destination. The three main distribution chains in supply chain management are transportation, logistics, and distribution.
The Benefits Of Logistics And Supply Chain Management
There are many benefits that are associated with Logistics and Supply Chain Management. One such benefit is better customer service. This is because a company’s success in business largely depends upon the satisfaction of its customers.
Customer Service
In today’s world, customer service plays a crucial role in deciding the success or failure of a company. A good example of this is how pharmaceutical companies are able to maintain strong customer relationships. A good example of a logistics provider is the hospital. The hospital needs to care for a number of different people at once and because of the high level of expertise required to keep them all healthy, the company must provide for the best quality services possible.
The hospital will purchase medical supplies from a global source that has a strong international reputation. They then make use of a hospital logistics provider to transport these goods to the various locations where they are needed. This process is called supply chain management and this is the major objective of Logistics and Supply Chain Management. In fact, it is an area of excellence within the field of Logistics and Supply Chain Management.
Shipment
Another objective of Logistics and Supply Chain Management is to ensure the smooth shipment of goods. From the factory where they are manufactured to the point where they are disassembled and sent to the end consumer. This is because good Logistics and Supply Chain Management ensures that the supply chain is maintained. Poorly maintained logistics systems can result in poor inventory management, transportation delays and missed opportunities for sales. These are issues that can have a significant impact on the bottom line.
Supply Chain Management Process
Logistics and Supply Chain Management involves a lot of planning, training and a whole lot of implementation. It involves the design, development and implementation of logistics and supply chain process. That is able to effectively handle the transportation of goods. From the factory where they are manufactured to the point where they are disassembled and shipped to the end consumer. This process is usually achieved through a sophisticated network design. The network design will take into consideration the physical location of the manufacturing. And assembly plants as well as the location of the actual end consumer.
Planning
Proper logistics planning will enable the manufacturer to identify the locations. In which goods should be transported and the kind of vehicles required for the journey. The next step involves gathering information about the goods and the customers. Once the data is ready, it should be used to design a logistical system. That would enable the manufacturer to reduce costs. By designing a shipping route with lower cost carriers and routes with better customer service standards. Once this system is in place, the company can improve its inventory management by establishing a detailed information flow. So that the company can monitor the transportation of goods and reduce costs associated with lost sales. Idle production and poor customer service.
Profit
As regards the benefits of Logistics and supply chain management. One major benefit is that it improves the overall profitability of any business. According to Richard Moor, bestselling author of Getting Things Done. The profit margin of a logistics and supply chain management operation can go up to 45%. This increase in profit is made up of three components namely. An improvement in the product quality, an improvement in the customer service and an improvement in the logistics system. The improvement in the product quality can be attributed to the fact that Logistics and supply chain management requires flexibility. It also enables a company to offer a variety of products. That can meet the needs of customers who are looking for a particular product.
Conclusion
On the other hand, the customer service improvement is attributable to the fact. That Logistics and supply chain management requires information flow. With information flow comes lower cost of operation, which in turn results in an increase in profitability. Finally, according to Moor, Logistics and supply chain management allows a company. To improve its customer relations by eliminating bottlenecks in the supply chain. Thus, as suggested above. A company will be able to realize maximum return on investment (ROI). Through the use of Logistics and supply chain management.
