| The mere mention of supply chain management, | | | | in the previous planning phase. It is during |
| outside of business circles, tends to set | | | | this phase that suppliers of raw materials |
| eyes rolling. While it may not be of | | | | and components are decided upon. Pricing, |
| interest to the average lay-person, it is an | | | | delivery, and payment terms are all |
| item of great interest to those in the | | | | considered at this time. |
| business community. Supply chain management | | | | |
| is a crucial element of good overall business | | | | Next, we consider the production phase. This |
| management. Long term viability and | | | | is also known as the start of the |
| corporate profitability are critically | | | | manufacturing process. Production related |
| dependent upon it. Let's spend a few minutes | | | | activities must all be accounted for at this |
| exploring the basics of supply chain | | | | time. Production, quality control, |
| management. | | | | packaging, and shipping all come into play at |
| | | | this important stage. This stage is also the |
| Supply chain management refers to the process | | | | most intensive, regarding metrics. |
| by which raw materials are acquired and used | | | | Production output, worker productivity, and |
| in the manufacturing of a product. It also | | | | overall product quality must be tracked and |
| takes into consideration the delivery of | | | | monitored closely. |
| finished goods, and the ability to process | | | | |
| returned goods. Ideally, these processes | | | | Delivery is the next phase to consider. This |
| should function as an organic whole. The | | | | area is generally referred to as logistics or |
| entire point and purpose of supply chain | | | | shipping. At this stage, systems must be in |
| management is to ensure that products can be | | | | place to coordinate orders. Orders must be |
| produced and delivered in an efficient and | | | | processed, tracked, and delivered. It is |
| profitable manner. | | | | also important to establish a payment system |
| | | | at this stage. Other considerations include |
| Supply chain management is comprised of five | | | | warehousing, trucking contracts, and |
| primary elements; plan, source, make, | | | | customs-related procedures. |
| deliver, and return. Each of these topics | | | | |
| represents five distinct elements of the | | | | One of the most oft overlooked elements of |
| production process. The planning stage is | | | | supply chain management is the returns |
| the stage in which strategic plans for | | | | process. Naturally, we would like to believe |
| production are made. This stage is | | | | that the products we produce and ship are |
| critically important, as it allows a company | | | | flawless. As you know, that is not always |
| to develop a strategy for managing their | | | | the case. Customers are not always |
| production process flow. Metrics are also | | | | satisfied, and systems must be in place to |
| established at this time, to ensure that | | | | reintegrate returned goods into the |
| elements of production can be monitored. | | | | production flow. Returned goods should |
| | | | always remain segregated until they can be |
| The next stage is equally important, as it is | | | | reviewed and assessed. By adhering to the |
| an extension of the planning phase. The | | | | principles noted above, you can ensure that |
| source phase refers to the early | | | | your company is sustainable and profitable |
| implementation of the strategic plans decided | | | | for years to come. |