Depending on the industry, the management of supply chain operations can take on many different forms. But in general, effective supply chain management ensures that an organization can ship and store materials in ways that support the bottom line.
Consider the following ten parts of effective supply chain management.
1. Demand Management
Demand management involves planning related to demand, merchandise and trade promotion.
Demand planning is focused on aligning inventory levels with demand to ensure the reliable delivery of products. Merchandise planning is focused on making products available at the locations, times, quantities and prices based on market demands. Trade promotion planning takes into account special pricing, retail displays, demonstrations and other promotions.
2. Workflow of Information
Modern supply chain operations are based on transparency and robust communications. Therefore, a critical part of supply chain management is establishing and maintaining a flow of information that travels up and down the supply chain. Numerous logistics management software platforms are capable of gathering and organizing information related to suppliers and shipments.
3. Sales and Operations Planning
Sales and operations planning (S&OP) is designed to inform and engage leadership on key supply chain metrics related to inventory management, sales, marketing, production and shipments. S&OP is designed to connect plans and strategies across an organization with the goal of making optimal business decisions.
Another key function of supply chain management is the sourcing of suppliers and vendors, including raw materials and shipping providers. Effective purchasing minimizes the amount of value tied up in inventory, maintains product quality, ensures an optimal flow of products, supports operations and provides a competitive advantage.
5. Supply Management
Maintaining proper inventory levels is critical to the success of supply chain operations. Having too much inventory can be costly, while stockouts can be devastating for both revenue and customer satisfaction.
Through the use of demand forecasting, inventory management can keep ahead of demand to ensure that there are products available and moving through the supply chain.
6. Product Portfolio Management
A critical part of creating new products is having a strategy for delivering that product so that it succeeds in the market. Product portfolio management covers the marketing of a new product, from its creation to its introduction. This area of supply chain management also covers and exit strategy for a product when sales drop off.
Products inside storage facilities must be properly handled and moved from one location to another. Not to be confused with the tracking of inventory, the actual physical storage of materials is a critical concern of supply chain management.
This area of supply chain management involves the transportation of goods from one location to another. While distribution is often thought of as transportation between warehouse operations, it can involve ‘last mile’ delivery to individual customers.
9. Management of Resources
From shipping activities to those associated with production, supply chain operations require resources. Resource management involves the monitoring and distribution of materials and services needed to support vital supply chain operations.
10. Customer Service
Customer-facing aspects of the supply chain are somewhat limited, but this doesn’t mean they are not important. Customer service functions ensure that expectations are being met and challenges are being addressed as they arise.
We Can Help You Manage All Areas of Your Supply Chain Operations
At ZDA, we strive to provide our clients with the talent they need to oversee all aspects of their supply chain operations. Please contact us today to find out how we can provide your operations with the top talents that they demand.