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.