Practical Applications of Supply Chain Management
In business, supply chain management, also known as supply chain monitoring, involves the transmission and receipt of raw materials, work-in-stage inventory, and of final products as
The process of sheet metal fabrication is complex, with many steps. It may involve welding, powder coating, or some other process. Parts may arrive powder coated or assembled using other methods. The process of powder coating involves a charged electrostatic powder being applied to the metal part. If there are no special requirements, fabricators will choose this method. However, the end result will depend on what the end user wants. When selecting a fabricator, you should know exactly what type of surface treatment you need.
well as inventory end-to-end and resource transfer from point of production to point of sale. In supply chain management, there is a need to determine the value of each asset in terms of its actual physical condition or what the company can get for that asset at the time of the cash conversion. This is done by the analysis of costs of supply chain and work in stage as well as the effect of market conditions and other external factors on the supply chain. There are three important stages in supply chain management; early stage, middle stage, and end stage.
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The early stage, also known as the identification stage, is the stage when supply chain management is being formulated by the supply chain managers. This stage involves the collection of data on the customers, suppliers, equipment and material, and human resources. The suppliers should be found out. This also involves a brief discussion about the suppliers’ credibility as well as the potential of the proposal, they will provide.
Supply chain management is considered vital when raw materials and energy are involved. An effective supply chain management system is needed to optimize the use of these resources. In supply chain management, it is very crucial to consider the entire life cycle needs of a product from production, through sourcing, through marketing, to supply, as well as consumption and disposal. Supply chain needs to take into consideration the impact of environmental issues on human health and the environment as well. Effective supply chain management therefore involves a multi-step process assessment that addresses all the factors that influence the supply chain including:
At the beginning stage of supply chain management, supply chain activities such as planning, pricing, production, gathering of data, packaging, and distribution occur. Planning refers to the strategies and techniques used to meet overall business requirements. Pricing is concerned with setting the prices for products. Production includes activities such as making the raw materials available to be used in manufacturing, removing the raw materials from the site, packaging and repackaging them, ensuring that everything is delivered to the clients, and lastly, the gathering of data and organizing the whole process. Gathering of data and organizing the process entail using computers and other sophisticated means to store and track the activities involved in each stage.
When supply chain management is being implemented, there are several ways to monitor the processes. Data gathered should be organized and reviewed as needed. The key performance indicators (KPIs) that are used to evaluate the process elements are the quality of product or service, level of integration, financial processes, customer satisfaction, and the life cycle costs or savings. The best practices or rules to be applied in supply chain management involve analyzing the linkages among the processes. This will include identifying the relationships among suppliers, manufacturers, distributors, and customers.
Another supply chain management practice is establishing a baseline supply of commodities. This allows the company to determine the current trend in commodity prices and to identify potential short-term or long-term changes in the market conditions. Based on the established baseline, adjustments can be made to increase the capacity of the processes. These changes, however, should only be done if there is a need to increase the efficiency of operations. If the need is only to adjust the amount of inventory to meet higher demand, then there is no need to increase the capacity of the processes.
One supply chain management practice is establishing a relationship between suppliers and manufacturers wherein manufacturers provide raw materials and raw products in a structured and organized manner. The manufacturer ensures that these raw materials are obtained at a fair price. In addition, he ensures that these raw materials are used in producing the final product efficiently and at a minimal cost so that the manufacturer is able to maximize the profits from his business.
Lastly, supply chain management also includes an effective supply chain management system that improves the quality and productivity of the overall operations. One way of improving the quality of the entire operation is by reducing supply chain errors such as purchasing too much inventory or delivering the wrong merchandise to the wrong customers. Likewise, improving the productivity of the whole organization will improve the efficiency of each and every process element involved. Thus, these practices will lead to the development of more efficient and productive companies.
