The Ultimate Guide To Supply Chain Management

Globalization has become an undeniable part of e-commerce over the last few decades. Supply chains have had to ensure optimal efficiency and cost-effectiveness as they pass through numerous countries to obtain goods. Managing a supply chain requires a dedicated team in every area the chain touches. It’s obvious to say that supply chain management is both an art and a science. Specialization in supply chain management is the need of the hour for professionals to understand the supply chain, logistics, and processes involved in the businesses. The IIM Supply Chain Management program of IIM Udaipur is the only one-year MBA that offers an intensive specialization in supply chain management. The infographic listed below highlights various aspects of supply chain management. Let’s get started.

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Introduction

Supply Chain Management (SCM) refers to streamlining the flow of products and services from manufacturers to customers. The comprehensive guide to supply chain management provides an overview of the various facets of SCM and how they work together. The IIM supply chain management program demands a high academic rigour including coursework, projects and experts interaction. It discusses the following:

What is Supply Chain Management?

SCM is the cohesive network of people, businesses, resources, activities, technology and knowledge that control the flow of products and services in an organization.

The 3 levels of Supply Chain Management

The best way to build an effective supply chain is to take a look at the three levels of SCM decisions:

Strategic Planning

Choosing the site and purpose of business
Creating a network of merchants, transporters and vendors
Making long-term improvements and innovations to meet demands
Managing inventory and product throughout the supply chain
Integrating technological advancements to make the supply chain more effective

Tactical Management

Procuring contracts for necessary materials and services
Creating production schedules and guidelines to meet quality and safety standards
Designing transportation and warehousing solutions
Defining inventory logistics, including storage and end-product distribution

Operational Level

Daily and weekly forecasting of demand
Scheduling of goods-in-process
Monitoring logistics activity for order fulfilment
Settling damages or losses with suppliers, vendors and clients
Managing on-hand inventories

SCM process flows

There are 5 significant flows in the supply chain.

The Product Flow

Designing the movement of goods from suppliers to consumers
Dealing with input materials like housekeeping
Maintaining the product flow from one process/assembly to another section
Ensuring a smooth flow of products in reverse order (rejections/return)
Creating the procedures for restocking, refurbishing or disposing

The Financial Flow

Deciding on cost, investment and flow from funds
Integrating pricing, credit terms, contracts, payments from consumers and other financial exchanges

The Information Flow

Coordination with suppliers, vendors, subcontractors and other parties

The Value Flow

Making the product more available and accessible
Controlling and regulating cost drivers
Reconfiguring the value chain to make it sustainable /li>

The Risk Flow

Planning for cash flow constraints, inventory financing and delayed cash payment
Assessing price Volatility or poor perceived quality of product or service
Preparing for a natural disaster or pandemic like COVID-19

Critical Elements of Supply Chain Management

Customer Relation Management (CRM)

Strategy for interaction with current and potential customers

Customer Service Management

Communication between customers and the company

Demand Management

Demand forecast for products/services

Order Management

Process of point-of-sale interest in delivering the product/service to customers

Manufacturing Management

Process of planning, scheduling and supporting the manufacturing process

Inventory Management

Process of organizing raw materials as well as finished products.

Return Management

Faster and more comfortable return process

Supply Chain Management Challenges for Modern Businesses

Globalization

Globalization leads companies to outsource manufacturing operations to several countries which complicates the supply chain

Business Process Improvements

Adopting and onboarding new advances in business processes can be overwhelming

Improved Customer Satisfaction

64% of customers don’t want to pay anything extra for less than two-day shipping

Government Regulations

Carriers face regulatory compliances imposed by union, state and local authorities

Technology Adoption and Implementation

From simplifying supply chain processes to enhancing efficiency, technology implementation should always be a benefit

Security

Security vulnerabilities are an ever-more prominent threat

Supply Chain Management Technologies

Automated Delivery use robots and other autonomous vehicles to increase efficiency
Robotic Picking allows the supply chain to cut costs, eliminate errors, speed up processes and link applications
Robotic Tracking use RFID (Radio-Frequency Identification) to improve inventory accuracy by 95%
Artificial Intelligence identifies patterns and produces more accurate forecasts
Analytics enhances logistics managers’ ability to plan operations, manage demand and improve processes for maximum efficiency
Cloud Storage is the most secure and efficient method of storing data
Immersive technologies such as Virtual Reality (VR) and Augmented Reality (AR) enable repair and maintenance capabilities in manufacturing, logistics and warehousing