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