SUPPLY CHAIN ZONE

SUPPLY CHAIN ZONE

That’s what supply chain visibility does, in theory. It allows everyone to see everything that’s happening along the chain—not just their own activities, but those of everyone else contributing to the process, both positively and negatively, and that makes issues and improvement opportunities easy to identify. However, the way the term has evolved is somewhat symbolic of the problems we still face today in realizing its potential in practice. It’s hard to believe but it’s true that the term “supply chain” hasn’t been with us all that long. It is one of those terms that has come of age within the past 20 years, simply describing the collaboration and flow of the process between various entities involved in pursuing the same goal.

Sourcing, manufacturing, warehousing, inventory controls, shipping, processing and tracking of orders—along with everything else that is unique to, or part of, this process—make a fairly complex set of activities more identifiable. The great challenge has always been to get all this working in harmony, eliminate duplication and wasted motion, and ultimately turn this harmony into a competitive advantage for those who do it well. 

Successful supply chain management requires implementing cross-functional processes within the company and integrating them with key members of the supply chain. Valuable resources are wasted when supply chains are not integrated, appropriately streamlined, and managed. The value of having standard business processes in place is that managers from different organizations in the supply chain can use a common language and can link-up their firms’ processes with other members of the supply chain, as appropriate.

Customer relationship management

Customer relationship management provides the structure for how the relationships with customers will be developed and maintained. Management identifies key customers and customer groups to be targeted as part of the firm’s business mission. The goal is to segment customers based on their value over time and increase customer loyalty by providing customized products and services. Cross-functional customer teams tailor Product and Service Agreements (PSA) to meet the needs of key accounts and for segments of other customers.

Supplier relationship management

Supplier relationship management is the process that defines how a company interacts with its suppliers. As the name suggests, this is a mirror image of customer relationship management. Just as a company needs to develop relationships with its customers, it also needs to foster relationships with its suppliers. As in the case of customer relationship management, a company will forge close relationships with a small subset of its suppliers, and manage arm-length relationships with others.

Customer service management

Customer service management is the firm’s face to the customer. It provides the key point of contact for administering the PSA. Customer service provides the customer with real-time information on promised shipping dates and product availability through interfaces with the firm’s functions such as manufacturing and logistics. The customer service process may also include assisting the customer with product applications.

Demand management

Demand management is the supply chain management process that balances the customers’ requirements with the capabilities of the supply chain. With the right process in place, management can match supply with demand proactively and execute the plan with minimal disruptions. The process is not limited to forecasting. It includes synchronizing supply and demand, increasing flexibility, and reducing demand variability. A good demand management process can enable a company to be more proactive to anticipated demand, and more reactive to unanticipated demand.

The order fulfillment

The order fulfillment process involves more than just filling orders. It includes all activities necessary to define customer requirement and to design a network and a process that permits a firm to meet customer requests while minimizing the total delivered cost as well as filling customer orders. This is not just the logistics function, but instead needs to be implemented cross-functionally and with the coordination of key suppliers and customers. The objective is to develop a seamless process from the supplier to the organization and to its various customer segments.

Manufacturing flow management

Manufacturing flow management is the supply chain management process that includes all activities necessary to move products through the plants and to obtain, implement and manage manufacturing flexibility in the supply chain. Manufacturing flexibility reflects the ability to make a wide variety of products in a timely manner at the lowest possible cost. To achieve the desired level of manufacturing flexibility, planning and execution must extend beyond the four walls of the manufacturer in the supply chain.

Product development and commercialization

Product development and commercialization is the supply chain management process that provides the structure for developing and bringing to market products jointly with customers and suppliers. The product development and commercialization process team must coordinate with customer relationship management to identify customer articulated and unarticulated needs; select materials and suppliers in conjunction with the supplier relationship management process; and, develop production technology in manufacturing flow to manufacture and integrate into the best supply chain flow for the product/market combination.

Returns management

Returns management is the supply chain management process by which activities associated with returns, reverse logistics, gatekeeping, and avoidance are managed within the firm and across key members of the supply chain. The correct implementation of this process enables management not only to manage the reverse product flow efficiently, but to identify opportunities to reduce unwanted returns and to control reusable assets such as containers. Effective returns management is an important part of SCM and provides an opportunity to achieve a sustainable competitive advantage.

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