Effectively Manage Your Inventory Using a Supply Chain Management Strategy

In business, supply chain management, also known as supply chain management, encompasses the process and movement of goods and services, from locations and companies, through stages of production to the point of ultimate consumption. The supply chain is an essential element in businesses that generate or deliver goods and services. The management of supply chain processes determines how products or services are obtained from the production plant to the point of use. It also specifies where those products or services are delivered.

Globalization

With globalization and the internet, global supply chains have become increasingly important to businesses of all sizes. This increased importance has prompted many retail companies to examine global supply chains and their methods of management. Recent surveys show that most large retailers are checking supply chain practices regularly, especially in their smaller markets. This is evident in the increasing demand for supply chain management consultancies and services that provide training, guidance, and tools to help companies explore and implement effective supply chain solutions. Furthermore, in light of increasing regulatory requirements and response to recent industry developments, the U.S. Department of Transportation recently concluded that the transportation of hazardous materials should be strictly regulated.

How then can companies best assure themselves that their supply chain management is robust? There are numerous ways to do this. First, they must develop internal resources and external relationships to tap into when required. In addition, they must commit to continuous improvement. This means tracking progress and making strategic decisions to improve continually. Finally, they must constantly evaluate and reassess their entire supply chain management strategy to stay on the cutting edge.

Planning

One of the top-level areas of consideration is planning. Planning helps to identify and plan for different processes that will ultimately deliver a result. For example, according to leading supply chain management consultancy Frost & Sullivan, companies can effectively align their internal processes and operational requirements by arranging for logistics and shipping. Additionally, planning helps to improve productivity, shorten cycle times, improve onsite service delivery, and reduce waste.

Quality Systems

Another top-level area of focus for supply chain management is quality systems development. This includes building prototypes, improving manufacturing efficiency, testing quality, standardizing specifications, implementing requirements, and constantly improving process performance. In addition, it requires a systematic process improvement, which includes eliminating defects and ensuring that the process is operating at maximum capacity 90 per cent of the time. By monitoring and measuring process performance regularly, manufacturers can ensure that they are meeting their targets and delivering the final product on time.

Sourcing

Another critical aspect of supply chain management is sourcing. In the U.S., this refers to the identification and evaluation of sources for raw materials and parts. Companies do so in many ways, such as locating manufacturers with the highest quality inputs, analyzing pricing, negotiating terms, matching supplies to finished products, and making sure that suppliers have adequate and reliable transportation systems. With the right information, suppliers can offer the final product to retail companies at the lowest prices available.

According to a leading supply chain management consultancy, one of the biggest challenges facing manufacturers today is increased inventory. Managing and sustaining stocks at all times during business cycles can be quite a challenge, which is why manufacturers need to implement a comprehensive supply chain management strategy. The analysis, testing, and manufacturing of new products can consume many resources, money, and time. According to Frost & Sullivan, integrating all production elements into one efficient system is a key to maintaining product quality levels. For example, part inventory software can help determine the most cost-effective locations for storing raw materials and parts. It can also help determine the optimal times to transport products from one place to another. Moreover, using an accurate material and parts inventory system ensures that there is always a sufficient stock on hand.

Conclusion

A good supply chain management strategy should include an effective sourcing methodology using Technology. According to procurement expert Peter Eisenman of the Strategic Sourcing Group in New York, determining the appropriate sourcing parameters for any product is crucial to its success. For instance, a company that produces a particular product, like cell phones, should only source for cells manufactured by Samsung and assemble them in a plant that makes cell phones. By adhering to the proper sourcing parameters, companies avoid wasting resources by purchasing the wrong products or wasting energy by transporting products that are unsuitable for their intended uses.

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Comments (4)

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