Monday, 31 December 2018

How to Optimize Supply Chain Management for the Company?

      Supply Chain is the philosophy. It is a way of understanding how a company creates value and how it connects to the world.  Supply Chains are getting the right thing to right place at right time. Humans have always done some sort of procurement, operations, and logistics. But over the time, as communities developed and population grew, transportation and storage options improved, the business community developed and then it expanded around the globe.
        Modern Supply Chain management beyond purchasing, operations, and logistics. Marketing and IT helps to get the data needed to those integrated plans. Engineers and Designers tell how to make the products customer want. Accounting helps to discover the opportunities to cut costs. Finance helps the need for money to buy materials, build plants and hire workers. Supply Chain Management is all about lower costs, improve service, reduce risks, and increase your profits.
SCM Goals:
      Successful businesses can't operate in a silo. They need to collaborate with their customers and suppliers and coordinate their internal functions. Each business has at least one link in the supply chain process. Modern companies understand the supply chains help to drive revenue by making great products. The primary goal of the organization is to produce a profit. The profit equals revenue minus costs. These 3 goals connect the organization strategies and desires to what happens in the supply chain every day.
  * First, modern supply chains are dual contributors to profit. Drive revenue by making great products or services that get to the right place at the right time and control costs by eliminating waste.
  * Secondly, the best companies understand these 4 categories: Cost, quality, speed, and flexibility. Modern Supply chain must able to define what the customer desires in terms of cost, quality, speed, and flexibility. It is to understand what the consumer find valuable.
   * The 3rd set of the goal is to create value for the customer but eliminate waste so you can simultaneously drive productivity.

Supply Chain Inventory:  For the company, stuff means inventory and the key to happiness are having enough inventory but not too much. The most common definition of inventory is any company asset that is held for future use or for future sale. To be a good inventory manager, you need strong skills in 3 distinct areas.
    * First, you must be a good planner. Having the right inventory in the right place at the right time that involves some global partnership and strong management skills.
    * Second, you must be a good coordinator to manage inventory effectively. You must work with purchasing, operations, and transportations in a timely manner.
    * And third, you must be a good controller. It is important to maintain the right amount of inventory that allows you to satisfy the customer.

    Supply Chain Manager responsible for inventory needs to make the customer and marketing department happy, by always having products in stock. Managing inventory is a big responsibility. Having inventory available is what sets you apart from your competitor. It is just like a city must be ready to satisfy the water needs of population or supply chain ready to satisfy the demand of its customers. Does your supply chain have enough inventory to satisfy demand today, tomorrow and next week?

Manufacturing &Operations: Developing a new Product can be very difficult when you think what the customer wants. So, your task is to develop a paper plane that must fly well and looks good based on what the customer thinks. It's interesting to watch the different development methods the team use. Some try lots of design until they find one they like. When they manufacture the plane, they often forget about consistent quality. Often, they will reject the planes, if they aren't up to the prototype standards. So, it is to think about what our company makes, the performance, aesthetic elements of your product or service, and design of the item and required skill and training of employees.
Supply Chain FrameWork: Supply Chain Operations Reference(SCOR) model breaks supply chain processes into 6 main groups. Plan, the processes where you map out how everything in the supply chain is supposed to work. Source where you build a relationship with the supplier and buy your
materials. Make which includes all the processes for assembly or manufacturing. Deliver the processes for getting your products or services into the hands of the customer. Return those often overlooked processes for taking back products that your customer don't need. Finally, Enable makes all of the other processes that you need to keep supply chain working smoothly. A good framework is an essential part of aligning the organization around the common set of goals and successfully implementing the supply chain.

Supply Chain Challenges: Supply Chain Management is making about the
trade-off. You have to maintain the balance to meet the multiple goals such as keeping cost low, providing a high level of service and earning a profit for your business. Using the balanced scorecard to track the performance along different dimensions so that you can keep supply chain running smoothly. Managers often focus on a single number as the best way to measure success. An Inventory manager might focus on managing high service level. An operations manager focus on maximizing capacity utilization. And the CEO might focus on maximizing the company's profitability. By using the balanced scorecard, you can track multiple key performance indicators for this business.

         Supply Chain Managers have to make a lot of tough choices between competing goals. Let's look at two conflicts that occur in every supply Chain. The first conflict is Sales and Operations. Salespeople tend to be optimistic about how much customers will buy and it's harder to make a sale when you don't have a product available. Operations and logistics managers want to maximize the capacity utilization while avoiding waste, shutdowns and over time. So production plans are constrained by time and capacity limitations, and the operations department shrink inventories in order to save money. The result of OverProduction, which creates an unnecessary inventory or Under Production which leads to lost sales. We can resolve this conflict by using the process called sales and operations planning or S&OP.  The second conflict is between the customer and suppliers.  The customer wants the product when and where they need, but the supplier doesn't want to have more inventory. Collaborative Planning, forecasting, and replenishment or CPFR is a process where customer and supplier share information which helps to prevent stockout in the supply chain while reducing inventories.

Supply Chain Trends: One of the biggest challenges in SCM is that customer expectation that change quickly. Social media amplifies customer behavior by making it easy to share customer reviews, recommendations, and endorsements. When influencer recommends a product, the result can be huge in sales. So tracking influencers can help you understand historical trends and generate forecasts. This process of tracking online discussions is called social listening. Companies often listen to several social media platforms like Facebook, Twitter, Instagram, and Linkedin. It is an ongoing process and should be interactive. If someone provides recommendations for your product, you may want to thank him. Similarly, Someone criticizes the product, you should be ready to engage that person, to address the issue before it has a chance to spread. Another trend in the supply chain is eCommerce or Amazon effect. The amplification effect of social media combined with amazon effect of online ordering and fulfillment are big changes in the supply chain.

          The five important information technology capabilities supercharging supply chains. Those are an Internet of Things(IOT), customer proofing, big data, cloud computing, and analytics. The equipment like conveyors, pallets, semi-trailers are outfitted with devices that connect them to the internet. Connecting these things to the internet gives more control over what is happening in the supply chain. Also, we are able to learn a lot about the customers. By using the internet to collect data about their behavior and use this data to build a customer profile or persona. While collecting tons of data about your supply chain and the customer can be useful. It is often better to use servers that you access remotely over the internet. This is called cloud computing or cloud storage. Analytics involves using your data to gain insights about what is happening in your supply chain.

BlockChains: It is a new technology that becomes important for supply chain professionals. Supply chain describes a network of companies that buy and sell things one another. And these transactions are recorded in the ledger. The blockchain is the way to keep a list of information and the transactions that occur between people or companies, but the way that blockchains stores these transactions are unique. Once the transaction is added to the blockchain, it can never be changed or removed. Blockchains are shared and copied into many different computers are called nodes. When one node wants to add a new block to the chain, they need to get the other nodes to agree. This process is called consensus.
          Block Chains has the potential to address 3 common problems that we face in the supply chain. First, it acts as a universal connector for information from different systems. In other words, it could increase supply chain visibility and operability. Second, it can help with data reliability. The third issue is the trust between trading partners. Blockchains make it easier to hold everyone accountable to the agreements they make. Some Block Chains will allow you to build smart contracts that execute when the conditions are met.

Saturday, 15 December 2018

What are the Basics of eCommerce Supply Chain Management?

     The supply chain is the process of making and delivering the products to the customer. In the technical perspective, the supply chain can be understood as a system of organizations, people, activities, information and various resources involved moving a product or service from supplier to customer. The supply chain activities involve the transformation of natural resources, raw materials, and controllers into the finished product delivered to the end user.
      The supply chain is the heart of company operations. In order to make the best decision, managers need access to real-time data through the new technologies that have the potential to take over supply chain management entirely disrupting traditional ways of working. With a digital foundation in place, companies can capture, analyze and interpret high-quality real-time data. The data fuels the process automation, predictive analytics, AI and the technology will take over the supply chain management.
        Leading companies have used robotics, AI to digitize and automate labor-intensive, repetitive tasks and processes such as purchasing, invoicing, account payable and parts of customer service. Predictive analytics helps the companies to improve demand forecasting so that to reduce the volatility, increase asset utilization, and provide customer convenience at optimized cost. Sensor data helps the manufactures to better estimate when the machines break down so that they can minimize the downtime. Block-chains helps to transfer the title, record permissions, and activity logs so as to track the flow of goods and services between businesses across borders. Robots are improving productivity and margins in retail warehouses and fulfillment centers.

Linking & Applications are facilitating the Block Chain: The technologies by which the physical goods and materials are identified and linked with their digital representation on the blockchain( e.g barcodes, serial numbers, digital tags like RFID and NFC, genetic tags)  in uniquely identifying a physical good with its digital counterpart.
    By design, every transaction in a supply chain is fully auditable. Smartphone applications can aggregate and display information to customers in a real-time manner. Also, the strong integrity properties of the blockchain are genuinely trusted. A thoughtful user interface can empower better purchases and giving the user a true choice that they can exercise.
       Let's take an example and analyze for the supply chain perspective. In order to prepare a cup of tea, you need
the following ingredients like water, milk, sugar, tea leaves, and Ginger. The journey of the supply chain starts with purchasing the ingredients or raw materials and this process of purchasing are called Procurement. The next stage of supply chain management is called manufacturing and operations. In this part, you are moving all the ingredients to make a cup of tea. It includes boiling the water to constrain in the cup or container. This process of making a cup of tea can be described as a company. The 3rd stage of supply chain management is logistics and transportation. Suppose, you want to carry your homemade tea to your office with proper packaging is the transportation stage. Every product has the supply chain process cycle and the supply chain manager is responsible for successfully managing that cycle.

Supply Chain Professionals: When planning, purchasing, manufacturing, order fulfillment, and logistics are largely automated, the supply chain executive will need to shift their focus from managing people doing repetitive and transactional tasks to designing and managing information and material flows with a limited set of specialized workers. The supply chain analyst who can analyze the data, structure and validate data sets and forecast effectively will be high in demand. So a handful of specialists will be needed to design a technology-driven supply chain engine that seamlessly supports the ever-changing strategy, requirements and priorities of the businesses.

Global Supply Chain Management: The global supply chain is the one that is not contained within the country boundaries and it extends to all the possible foreign countries whether they are vendors or manufacturers or customers. The need for the global supply chain can be understood the following points,
  1. The concept of economics tells us that the main reason for the business to exist is to lower the costs while simultaneously increasing sales and profits. So when the business goes global, the likelihood of sales also goes up because business opens up the global market have consumers all around the world.
 2. The global supply chain allows businesses to reduce dependencies on the local and national economies because they have business in different nations that will help their economy to sustain even the economy of that nation falls down.
3. The global businesses considering all hours of the day with consumers from every point on the globe. The businesses can go for 24 hours a day, 7 days a week. 365 days a year with the number of internet users in the right way.
4. Good businesses are always directed in the motive of reaching as many customers as possible. The global supply chain allows the scope of expansion and reaches more customers as they enter into the market.

Elements of Supply Chain Mangement: Business experts narrowed down the elements of SCM into four categories. Those are Demand Management, Effective communication, Process Integration, and Collaboration.

  Demand Management: Demand management is a planning methodology used to forecast, plan for and manage the customer demand for product and services. Every aspect of the business should be focused on your customer. The success of demand management is all about pulling the supply and resources through the supply chain system in the same manner in which they are needed to meet the actual customer demand.
             The supply and demand of the product and services should always go hand in hand. In the competitive market, multiple companies have the capability of satisfying the customer. The supplier will create enough product to meet the demand of a certain price. So, when the supply exceeds the demand the price will go down, On the other hand, when the demand exceeds the supply, the price will go up. It is clear that consumers react to the price of the available supply.

Effective Communication: Effective communications are important in Businesses and Supply Chain. When the organization identifies the sources of demand, then the operational information will be disseminated to all the members, especially who are involved in the supply chain. Effective communication will help to remain their duties and responsibilities in the supply chain network so that they can deliver what is expected of them,

Process Integration:
SCM involves the integration of business processes in order to facilitate the continuous flow or movement of resources. In other words, SCM entitled collaboration and partnership between the players of business processes. It covers the relationship between the suppliers, buyers, product developers, and end users so that the information being shared or exchanged among them.
  It has the following processes,
  1. Customer Management: It involves customer relationship management and customer service management. The organization has to provide real-time information about its products and services such as availability, logistics and other information that customers may be interested in.
 2. Manufacturing Flow Management: The predictive value of the demand management process enables the organization to produce and supply products and services more reliably and in a more flexible manner. Depending on the demand, the organization can make a better decision related to the manufacturing processes such as scheduling, batches, lot sizes, and work intervals.
3. Procurement Management: It is more than a simple act of purchasing. There are a lot of details to pay attention to obtaining raw materials and products from suppliers outside the organization. It includes sourcing for suppliers, resource planning, assessing the need for supplies of the organization, order placement, transport, storage and warehousing of the purchased supplies. The important steps in procurement processes are to discover and select potential suppliers and develop & manage the supplier relationships.
4. Product Development:  SCM helps to shorten the product life cycles and decrease the time to market the products. Thus product development can easily be integrated with customer service and customer relationship management.
5. Inventory Management: Businesses has to maintain an inventory of their supplier or raw materials. Companies maintain the inventory or stock of the materials until it will be needed in the manufacturing process. The inventory management process covers to keep track finished goods that came out of the production process and awaiting delivery to the customers. Also, it will be conducted to keep the amount of wastage low, as well as the cost of storing inventory.
6. Supplier Relationship Management: It is related to the procurement process. The companies conduct procurement process smoothly and more efficiently that relies on the relationship of organization with suppliers or providers of the materials that are being procured.

Collaboration: It is the relationship between top management and its people, between members of the organization and partners in the supply chain. Maintaining a good relationship with suppliers will increase the likelihood of reducing the costs as well as they provide the quality of materials or product that they supply will be high. You might be seen the companies had partnered with certain suppliers for years or decades even. This is because of the excellent SCM, with a focus on collaboration and partnership.