Have you heard of Just-in-time, TQM, The rise of Toyota as a powerful global player in the automotive industry, even surpassing the gaping mouths of the big three in the United states? You would have certainly come across the term 'Supply Chain Management' - It sounds like jargon, doesn't it? Well, it isn't so difficult to understand and it is something most manufacturing ( even services!) industries indulge in today. Supply Chain management basically means that the process of managing the whole process of finding a suitable raw material, processing it and converting it into something valuable or useful that could be sold to the market.
The better a company is in managing its resources, the process of locating its raw materials, processing them, working on them, the entire production process, the out put, the packaging and even the labelling might constitute a simple supply chain management case study.
According to the CIO Magazine,
Supply chain management (SCM) is the combination of art and science that goes into improving the way your company finds the raw components it needs to make a product or service and deliver it to customers. The following are five basic components of SCM.
Supply Chain Management has a lot of visible and also invisible elements to it. The glamorous parts might probably be the vendor management and the like. It is the invisible parts of the supply chain that attain the status of primary importance. Things like labor management, procurement, warehouse management, Order processing, fulfillment and delivery.
The importance of supply chain management has been growing steadily over the recent years and more so because of the fact that the companies have been growing larger and larger in size.Due to this enormous increase in size, the companies gain more cost efficiency when they outsource some of the functions that they ought to do themselves to other specialized service companies that do the needful. This enables the larger companies to be more flexible, focus more on their core competencies and create more value for their customers, while retaining profits by reducing costs at the same time. The ubiquitous, simple to use, nature of the Internet has made it possible to automate some of its supply chain management elements with the help of robust supply chain management software ( Though it is always not so easy to do the implementation and execution part!).
The extended supply chain - the vendors and their vendors network, has always become a critical link in the new era of Modern supply management theory and has taken it to another realm where everything boils down to cost cutting such that the whole process can create value for the customer.
Global supply chain management has emerged as a major topic in the age of globalization and now it is sitting at the heart of the whole system. But you might be asking yourself, so what exactly is supply chain management and how can it affect my company?
Let's understand what it is first.
From the production house the product starts it journey and travels through to the supplier, distributor, retailer and ends at the hands of the consumer. This whole journey is a well managed mechanism and controlled by supply chain management. When it goes global and the journey of the product covers multiple countries, then it is called global supply chain management.
With globalization, business has become more complex. Global supply chain management not only mobilizes products but also the entire value added chain, in which financial activities and sharing of information are also included.
Big companies have many hubs around the world. Raw materials, finished products, finance and other pertinent information travel from one hub to the next. Global supply chain management is the basis of the whole operation.
The cost of production and profitability is dependant on the global supply chain as well as how well employees throughout the company are trained for such fast-paced tasks.
Global supply chain management has two major components:
1. International movement of products and raw materials, title transformation, payments, controlling risk factors 2. In parallel with the above activities, an information network is hard at work. Information sharing and collecting is very important to run an effective global supply chain management system
The efficiency of the global supply chain management of any company can make everything look easy. However in order to attain those efficiencies your employees need to understand the fundamentals. The most basic fundamental is that supply chain management is not just domestic anymore nor is it just for large corporations. Small and midsize companies have to be global supply chain management savvy if they wish to survive.
The growth and development of a company is largely dependent on the global supply chain management system and its most important asset - employees.
Are your employees top-notch when it comes to global supply chain skills? If you can't answer yes then you better start thinking about training because your competitors are.
So, what type of training is needed companywide?
First, introduce employees to global supply chain management. Don't assume they grasp the concept. With increased globalization and offshore sourcing, global supply chain management is becoming an important issue for many businesses. So, make sure the foundation is laid.
Second, employees should learn the underlying factors behind the trend to reducing the cost of procurement and decreasing the risks related to purchasing activities.
Third, they should understand the following principles: a) competition is no longer among independent companies but instead about connected supply chains b) supply chain competition is global c) winners will be companies that best integrate and achieve commitment to supply chain excellence among diverse organizations
Both Rajiv Singh & Sherry Harris are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Rajiv Singh has sinced written about articles on various topics from Internet Marketing, Food And Drink and Affiliate Programs. Snowman Frozen Foods Ltd. is the first company in India to set up frozen and chilled food distribution system on pan India basis. "> Cold Chain is i. Rajiv Singh's top article generates over 4400 views. to your Favourites.
Sherry Harris has sinced written about articles on various topics from Alternative Medicine, Cure Anxiety and Sleep Disorder. Sherry Harris is the President and CEO of online career training school, Malibu Institute. For more information on master certificate courses and programs offered, go to:. Sherry Harris's top article generates over 27100 views. to your Favourites.