This Article will satisfy you quarry regarding Supply Chain Management,
Logistics Management, Material Management, and Merchandise Management Inventory
Management including Warehouse / Godown /Stores Management or Stock of the
product Management as well as this article offers good, clear answers to some of
the basic supply chain questions that are asked by those new to the concept of
the supply chain.
• What is supply chain management?
• What does supply chain software do?
• What is the relationship between ERP, CRM and SCM?
• What is the goal of supply chain management software?
• What is supply chain collaboration?
• What is the impact of globalization on the supply chain?
• How has radio frequency identification (RFID) technology affected the supply
Introduction to Supply Chain Management:
If your company makes a product from parts purchased from suppliers, and those
products are sold to customers, then you have a supply chain. Some supply chains
are simple, while others are rather complicated. The complexity of the supply
chain will vary with the size of the business and the intricacy and numbers of
items that are manufactured.
Elements of the Supply Chain:
A simple supply chain is made up of several elements that are linked by the
movement of products along it. The supply chain starts and ends with the
The customer starts the chain of events when they decide to purchase a product
that has been offered for sale by a company. The customer contacts the sales
department of the company, which enters the sales order for a specific quantity
to be delivered on a specific date. If the product has to be manufactured, the
sales order will include a requirement that needs to be fulfilled by the
The requirement triggered by the customer’s sales order will be combined with
other orders. The planning department will create a production plan to produce
the products to fulfill the customer’s orders. To manufacture the products the
company will then have to purchase the raw materials needed.
The purchasing department receives a list of raw materials and services required
by the production department to complete the customer’s orders. The purchasing
department sends purchase orders to selected suppliers to deliver the necessary
raw materials to the manufacturing site on the required date.
The raw materials are received from the suppliers, checked for quality and
accuracy and moved into the warehouse. The supplier will then send an invoice to
the company for the items they delivered. The raw materials are stored until
they are required by the production department.
Based on a production plan, the raw materials are moved inventory to the
production area. The finished products ordered by the customer are manufactured
using the raw materials purchased from suppliers. After the items have been
completed and tested, they are stored back in the warehouse prior to delivery to
When the finished product arrives in the warehouse, the shipping department
determines the most efficient method to ship the products so that they are
delivered on or before the date specified by the customer. When the goods are
received by the customer, the company will send an invoice for the delivered
Supply Chain Management
To ensure that the supply chain is operating as efficient as possible and
generating the highest level of customer satisfaction at the lowest cost,
companies have adopted Supply Chain Management processes and associated
technology. Supply Chain Management has three levels of activities that
different parts of the company will focus on: strategic; tactical; and
At this level, company management will be looking to high level strategic
decisions concerning the whole organization, such as the size and location of
manufacturing sites, partnerships with suppliers, products to be manufactured
and sales markets.
Tactical decisions focus on adopting measures that will produce cost benefits
such as using industry best practices, developing a purchasing strategy with
favored suppliers, working with logistics companies to develop cost effect
transportation and developing warehouse strategies to reduce the cost of storing
Decisions at this level are made each day in businesses that affect how the
products move along the supply chain. Operational decisions involve making
schedule changes to production, purchasing agreements with suppliers, taking
orders from customers and moving products in the warehouse.
Supply Chain Management Technology:
If a company expects to achieve benefits from their supply chain management
process, they will require some level of investment in technology. The backbone
for many large companies has been the vastly expensive Enterprise Resource
Planning (ERP) suites, such as SAP and Oracle.
Since the wide adoption of Internet technologies, all businesses can take
advantage of Web-based software and Internet communications. Instant
communication between vendors and customers allows for timely updates of
information, which is key in management of the supply chain.