First of all we need to know about what is supply chain management?
Basically, Supply chain management is the most accurate way for coordinating, implementing and evaluating supply chain activity. The management of supply chain extends from manufacturing point to end of use, including the transportation and storage of raw materials, working stock and finished goods. The administration of the supply chain includes all functions responsible for the implementation and management of logistics, purchase orders and logistics. It also includes networks, intermediaries, third-party content providers and customers who are eligible to be collaborators on the platforms. Administration of the supply chain covers all companies with seven market controls.
Why decision of supply change is very important?
The creation & management of supply chain flows (product, knowledge & funds) and the performance of the supply chain are closely linked to each other. Wal Mart, dell computers and seven-eleven Japan are examples of firms that have successfully expanded on their excellent supply chain architecture, planning & service. In comparison, deficiency of the architecture and strategy of certain e commerce companies, such as the Site van, may be due to.
Wal-Mart was a pioneer in the concept, preparation and execution of supply chain for growth. The group has made heavy investments in transport and communication technology to promote efficient movement of goods and information. In order to make the daily refilled-in at its discount stores simpler, Walmart built its supply chain of clusters of shops in the city. Frequent refills make shops more competitive than competition to balance supply and demand. Wal-Mart was the pioneer in knowledge sharing and working with vendors to lower costs and increase supply of products. The corporation reports total sales of more than 9 billion dollars on revenues of about $250 thousand in its 2004 annual report. Many companies uses these strategic phase in their business such as Wal-Mart & Dell get a good portion in their reputation because of their efficient supply chain layout, 2 | P a g e development and execution. This are the dramatic effects for a corporation with just $1 billion in annual revenues in 1980. Sales growth represents 26 percent as a weighted annual growth rate.
Three stages of decision phase:
The decision phases may be defined as the different phases during which steps or decisions related to supply chain management of certain goods or services are implemented. Effective supply chain management requires judgment in three decision-making stages on information flows, goods and funds.
Here are the three key decision-making phases in the whole supply chain process. The three steps are below –
Supply Chain Strategy
Most of the management decides in this process. The decision to be taken assumes that these pieces are long-term and cost-effective commodities if they go wrong. The business dynamics at this point are very relevant to research. These decisions take into account the current and prospective business environment. The layout of the supply chain is structural. The responsibilities and duties of each one are laid down after the specification has been prepared. The higher authority or senior management takes all policy decisions and the manufacturer determines how to organize the supply, how resources are distributed and the layout of the chain by the business. These decisions include decision making of the products, the place of manufacture, simple loading and shipment at their designated location for the transporters, location of warehouses to store the finished product or merchandise, etc.
Supply Chain Planning
Depending on the demand and supply view, the supply chain should be planned. Business analysis should be undertaken to consider consumer requirements. Secondly, knowledge of the rivals and their plans to meet their customers’ requests 3 | P a g e and needs is up-to-date. As we know, multiple markets have varying demands and a different approach should be approached. This process comprises everything beginning with the forecast of future demand to where the finished products scheduled for the plant in this phase are supplied on the market. The whole procedure should be as flexible as possible by all of the members or staff participating with the enterprise. When it works well for short-term planning, a supply chain design phase is deemed good. The main objective of planning is to optimize the surplus supply chain, which can be achieved over the planning horizon in view of the restrictions during the strategic or construction phases. This Planning also entail the decision on the markets from which areas to be delivered, the subcontracting of production, the inventory policy to be implemented and the time and scale of marketing and pricing promotions
Supply Chain Operations
The third and final level of decision-making consists of multiple functional actions to be taken quickly within minutes, hours and days. The goal of this decisive move is to reduce confusion and maximize efficiency. All is included in this process, starting with managing customer requests to supply the customer with this commodity. Throughout this business phase company distributes inventory or production to individual orders, send an order in a specific shipment, create delivery times of trucks and order refilling. Imagine, for example, a client requiring an object produced by your firm. The marketing department initially takes up the order and transfers it to the manufacturing and inventory services. The manufacturing department then addresses customer demand by delivering the appropriate item through a correct medium to the warehouse and ships it to the customer within the short term. In order to increase efficiency and reduce confusion, all the agencies participating in this phase must work.
A efficient and reliable network management, seamless operation of a company, better products and future advantages, hence growing customer confidence and 4 | P a g e market. In order to reach this stage in the development of an association, everyone relies on the best decisions to go the right direction. This decisions are usually the after-effects of previous activities and external knowledge integrated to include information or education. Therefore, it is recommended to combine evidence from these three main decision steps of the supply chain management with a decision-making support system. All three stages of the supply chain have a direct impact on sustainability and success overall. In one framework, where the implementation, design and operating stages run.
