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Supply Chain Activities
/ Functions:
Supply Chain Management is a cross functional approach to
managing the movement of raw materials into an organization
and movement of the finished goods out of the organization
toward the end consumer.
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Several models have been proposed to understand the
activities required to manage material movement across
organizational and functional boundaries.
SCOR is a supply
chain management model promoted by the supply chain council.
Another model is the Supply Chain Management floated by the
Global Supply Chain Forum (GSCF).
Supply Chain activities
can be grouped into strategic, tactical and operational
level of activities.
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A firm’s
Supply Chain Management efforts start with the development
and execution of a long-term supply chain strategy. Among
other things, this strategy should:
- Identify what supply
chains the firm wants to compete in
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Help managers understand how the firm will provide
value to the supply chain
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Guide
the selection of supply chain partners, including
suppliers, subcontractors, transportation providers,
and distributors
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As firms gear up to understand what supply chains they
compete in, it is often valuable to map the physical flows
and information flows that make up these supply chains. From
these maps, firms can begin to understand how they add
value, and what information is needed to make the supply
chain work in the
most effective and efficient way possible. |
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Of course, the firm’s supply chain strategy does not
exist in a vacuum. It must be consistent with both the
overall business strategy and efforts within such areas
as purchasing, logistics, manufacturing and marketing.
The Supply Chain activities have to be clearly spelled
out for the given business.
Strategic activities :
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Strategic network optimization, including the
number, location, and size of warehouses,
distribution centers and facilities.
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Strategic partnership with suppliers,
distributors, and customers, creating
communication channels for critical information
and operational improvements such as cross
docking, direct shipping, and third-party
logistics.
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Product design coordination, so that new and
existing products can be optimally integrated into
the supply chain, load management
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Information Technology infrastructure, to support
supply chain operations.
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Where to make and what to make or buy decisions
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Align overall organizational strategy with supply
strategy
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Sourcing contracts
and other purchasing decisions.
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Production
decisions, including contracting, locations,
scheduling, and planning process definition.
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Inventory
decisions, including quantity, location, and
quality of inventory.
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Transportation
strategy, including frequency, routes, and
contracting.
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Benchmarking of
all operations against competitors and
implementation of best practices throughout the
enterprise.
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Milestone payments
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Operational activities : |
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Daily production and distribution planning,
including all nodes in the supply chain.
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Production scheduling for each manufacturing
facility in the supply chain (minute by minute)
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Demand planning and forecasting, coordinating the
demand forecast of all customers and sharing the
forecast with all suppliers.
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Sourcing planning, including current inventory and
forecast demand, in collaboration with all
suppliers.
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Inbound operations, including transportation from
suppliers and receiving inventory.
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