Supply management encompasses finding, purchasing, and handling products and suppliers vital to an organisation’s operations.
It involves acquiring tangible products, knowledge, services, and other resources needed for a business to continue operating and growing. Such methods attempt to bridge the gap between supply and demand, making supply management solutions a necessity.
These days, almost all of these processes are digitised.
The software tools or modules used in conducting supply chain transactions, managing supplier relationships, and monitoring related business processes are known as supply-chain management software (SCMS).
This software is capable of making predictions based on data and analysis of current trends. It is usually a prerequisite for some of the software. They optimise business processes using algorithms to help plan for future requirements. They also support integration technology, which enables companies to conduct exchanges electronically with their supply chain partners. Such methods attempt to bridge the gap between supply and demand, making supply management solutions a necessity.
Steps of Supply Chain Management Process
Demand Planning – Demand planning is the method of collecting all available data related to past sales, predictions of product types and quality, etc. This step determines the primary course of action and hence is the first step of the process.
Production Planning – In this step, the organisation decides where and how the goods listed in the demand plan will be produced.
Materials Required Planning – Materials required planning (MRP) is the step that assists in calculating the materials required for product manufacturing.
MRP is made up of three main steps:
- In-hand inventory of products or parts.
- Additional materials or components.
- Development or purchase scheduling.
Inventory Management and Logistics – Inventory management is in charge of overseeing products’ movement from suppliers to warehouses and finally to retail outlets.
Inventory management’s primary aim is to keep track of new product entry, product returns, and product sales from warehouses.
From the beginning of the supply chain, with the distribution of parts and components to suppliers, to the delivery of finished products to retailers or directly to customers, logistics come into play, which is the transportation and storage of goods.
As a result, inventory control is woven into the logistics process.
Strategic Sourcing – Strategic sourcing is a method of building supply chains that formalises how information is collected and used by companies for consolidated buying power. It helps the companies identify the best available consumer values and match the purchasing strategy with business goals.
Role of Supply Management Solutions Executives
Transportation, warehousing, inventory control, and production planning are all supply chain roles that supply chain practitioners must be familiar with.
Logistics skills, such as knowledge of shipping routes, experience with warehousing equipment, and distribution centre locations and footprints, are highly valued by supply chain professionals.
Supply chain solutions executives play a vital role in making and managing supply chains. They help in deciding whether products and services are outsourced or not. Supply chain professionals organise production from multiple suppliers to ensure that the products are produced and transported with minimal quality control and inventory problems, saving time and money.
SCMS will assist the executives in their tasks and increase their efficiency.
One of the aims of a well-designed and managed product supply chain is to efficiently build the product at a low cost. A supply chain like this could give any business a competitive advantage, and SCMS helps the business reach this goal with ease!
