SUPPLY CHAIN MANAGEMENT

WHAT IS SUPPLY CHAIN?

Supply chain process:

Supplier

Raw materials, components

Producer

Products, services

Customer

Retailer, wholesaler, distributor, end user

INTRODUCTION TO SUPPLY CHAIN

MANAGEMENT

Supply Chain Management can be defined as the management of flow of

products and services, which begins from the movement and storage of raw
materials and ends with the furnished goods.

Supply chain management is the coordination of production, inventory,

location and transportation to achieve the best efficiency for the market
being served.

PUSH/PULL STRATEGIES OF SUPPLY

CHAIN MANAGEMENT

PUSH STRATEGY:

Under a push strategy, companies have predictability in their supply chains

due to long term demands.

Long term forecasting helps company to manufacture optimum products.

Seller is focused to push their products in market.

PULL STRATEGY:

Under a pull strategy, company produce required number of products as per

customer demands.

A pull strategy is related to the just-in-time of inventory management that

minimizes stock on hand, focusing on last-second deliveries.

SUPPLY CHAIN MANAGEMENT PROCESS

The five basic components of supply chain management are:

Plan

Develop

Make

Deliver

Return

SUPPLY CHAIN MANAGEMENT PROCESS

PLAN

Initial stage of supply chain management

Developing a plan to make sure how the products and services will satisfy the
demands of customers

Planning mainly focus on designing a strategy that yields maximum profit

DEVELOP

This stage mainly concentrates on developing a strong relationship with

suppliers of raw materials.

By selecting dependable suppliers, the items and services which are require
to develop the product is delivered on time.

Making of set of pricing, delivery and payment process with suppliers is done

SUPPLY CHAIN MANAGEMENT PROCESS

MAKE

This stage includes manufacturing of products that were demanded by

customer.

In this stage, products are designed, produced, tested, packaged and

prepared for delivery.

The supply chain manager prepares the schedule of all the activities required
for manufacturing, testing, packaging and preparation for delivery.

DELIVER

In this stage, products are delivered to the customers.

Here, customer orders are accepted and delivery of goods is planned.

After that pick carriers delivers product to customers and receive payments.

SUPPLY CHAIN MANAGEMENT PROCESS

RETURN

In this stage, defective or damaged products are returned to the supplier by

the customer.

The planners of supply chain need to prepare a responsive and flexible

network for accepting damaged, defective products back from the customers.

SUPPLY CHAIN MANAGEMENT PROCESS

FLOW
Material

Supplier

Information
Money

Customer

SUPPLY CHAIN MANAGEMENT PROCESS

FLOW

MATERIAL FLOW

Material flow includes a smooth flow of an material from the producer to the
customer.

This is possible through various warehouses among distributors, dealers and

retailers.

There must be smooth flow of materials without any stoppage at different

points in the chain.

The material can also flow from customer to producer for any kind of repairs
and exchanges.

SUPPLY CHAIN MANAGEMENT PROCESS

FLOW

INFORMATION FLOW

Information flow from producers side includes the presentation of company,

offer, purchase order, monthly schedules, dispatch details, reports on
inventory and invoices.

Information flow from customers side includes quality complaints and report
on supplier performance from customer.

SUPPLY CHAIN MANAGEMENT PROCESS

FLOW

MONEY FLOW

On the basis of invoice raised by the producer, customers examine the order
of correctness.

If claims are correct, money flows from customers to the respective

producers.

In order to achieve an effective supply chain, it is essential to manage all

three flows properly with minimum efforts.

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