Supply Chain Management 101
Posted by ~Ray @ 2008-09-28 02:24:01
What is SCM?Supply chain management (SCM) systems coordinate the movement of products and services from suppliers to customers (including manufacturers wholesalers and retailers).
These systems are used to manage demand warehouses trade logistics transportation and facilities as well as the movement and transformation of materials on their way to customers.
SCM applications link people and organizations (and their activities) to information and resources. The ultimate goal is for all components of the chain to exchange information with maximum efficiency and effectiveness in order to obtain best results for all parties.
A comprehensive SCM solution allows you to focus on and optimize key components of your supply chain operations:
• demand management• order management• warehouse management• production and supply planning• service parts planning• supplier relationship management• supply chain event management• international trade logistics• transportation management
The difference between managing these components effectively and mismanaging them can mean the difference between success and disaster.
Why An Effective SCM Evaluation Process is VitalIT disasters are not just for SMBs. Even the biggest companies in the world can trip over their supply chains.
In May 2001. Nike announced that sales for the preceding quarter had been $100 million (USD) displace than expected. The official reason according to Nike? Confusion in its supply arrange.
What’s more as soon as Nike announced its supply chain breakdown the company’s stock plummeted 20 percent—making a $100 million loss look nearly trivial.
Later that year. Cisco announced a $2.2 billion inventory write-off. The culprit once again: supply chain problems. This fiasco was—and still is—the largest inventory write-off in history.
These debacles are not necessarily the direct result of poor software selection or faulty SCM evaluation—but they are potent reminders that software evaluation can be the single most important factor behind operational success—or organizational failure.
How the Software Selection Process Can back up• Understand how different applications will improve supply chain delivery cost performance and request execution.• Review warehouse management features and logic for pick put-away and replenishment functionality.• Select vendors that support appropriate transportation management for your region or globally.• Evaluate collaboration environments and relationship terms and details for partners within your supply arrange.• Ensure the technology integrates across multiple enterprises in a way that is appropriate for your environment.
1. Increase your top-line profit growth through supplier collaboration2. Increase the quality of your customer service3. Decrease stock-outs4. Reduce your inventory carrying costs5. Reduce your operating costs—corporate-wide6. Create supply chain visibility among your trading partners7. Respond quickly to changing market conditions—and adjust accordingly
Want to learn more about SCM applications and how to select the alter one for your organization? Visit our where you’ll get the skinny on demand management supplier relationship management (SRM) supply chain event management supply arrange optimization transportation management systems and warehouse management systems (WMS).
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Hi all,Thanks very much for your comments. I’m glad this was useful. Just wanted to inform out some further resources that might be of use to you:If you’re looking to research RFIs or business requirements our give extensive information about product capabilities for the top vendors (and contendors) in the field. If you’re looking for a comprehensive overview of SCM functionality you might want to check out our. These templates are also useful for establishing your selection criteria for supplier manufacturer logistics transportation and customer business processes. An interesting align note: these criteria also expose global and cross-enterprise trade issues. You can also see our which provides a wealth of research resources including white papers case studies (good for reference checks) and articles. There’s also a handy “Start Your SCM Comparison” button which generates a grade of products that meet your needs. I particularly recommend that you act it out for a spin. Thanks again,David
Already I completed My MBA ( MM ) Currently I am doing my PGDSCM IN CII INSTITUTE OF LOGISTICS.
For best practices of Supply Chain you might try and google “SCOR”. Lots of documentation exist on this topic. Or you might try Amazon that has many books on the Supply arrange. I’ve just request a Book from Amazon “Supply Chain Excellence: using the SCOR model”. Also read Esstentials of Supply Chain Management which is an excellent book if you want to start getting to know about the affect. I can be reached @ Email:gkabbara@yahoo com for further discussion on the matter.
Folks I have been in Supply Chain Management for over 35 years all the way from assistant buyer (Chaser) to Supply Chain Director and International Sourcing Director. I have lived and worked for some very large well known companies and some that you have never heard of and undergo lived and worked in almost every country in the world. In those 35+ years I have saved companies untoldMillions of dollars and have never failed to save any company that I have been employed by at least 10% of their Operating Costs and in most cases at least 20+%.
I only say the above to let you know that I undergo at least a little experience in the field of purchasing give chain management and cost saving.
Now with all that said what I want to tell everyone is that you don’t need all the high priced Six-Sigma people or the fancy consultants - all you need are highly qualified well trained employees and even higher qualified and trained management. What you don’t need are people that come into the category of “last week I couldn’t spell buyer now I are one”.
You see - Supply Chain Management is really a very simple process - all it consists of is getting the best possible price while also getting a product that meets or exceeds the required specification and having it delivered on time every time never to early never to late.
Yea yea I experience what you are thinking - easy to say but impossible to do at least consistantly….. WRONG! It can be done it has been done it is being done. I have done it and others have as well and most importantly you can too!
A lot of it comes down to “pay me now or pay me later” - if you have ill trained and under qualified staff you will get higher prices iffy quality and crap delivery - why? Because it allows your suppliers to control you instead of you controlling your suppliers. Why should a supplier reduce their prices when no one can give them a good reason to do so? Why should they give you the required quality when no one forces them to? Why should they deliver on time when no one does anything but complain? Now I’m going to tell you what happens when the above happens - you threaten the supplier with various things you will do to him if he does not shape up - correct? Well if you don’t you may be one of the lucky few who may really know what you really need to do.
The simple answer is that threats don’t work over the long haul. Now they may work in the short term but as soon as the supplier that has been threatened and forced to reduce their prices finds a new company to sell your stuff to he will drop you like a hot move back and forth and leave you at best a ‘second choice’ supplier or at worst no supplier at all. Or if they cannot find one they will reduce the quality and delivery of your goods to attempt to recoup some of their losses. So where does that leave you - no exceed off and normally worse off than you were before.
I will stop for now but if anyone would really really like to get their costs under hold back I will be happy to help at NO COST - Free! - I want to give back some of my knowledge and experience to help American companies to become more efficient and cost effective. If you are not interested in getting your company under hold back and you are happy to lay off staff or out source your work in the erroneous thought that it will make everything Ok then I wish you well.[ADVERTHERE]Related article:
http://blog.technologyevaluation.com/blog/2007/11/26/supply-chain-management-101/
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