A supply chain is a system of organisation, people, activities, information, and resources involved in moving a product or service from supplier to customer. Supply chain activities transform raw materials and components into a finished. In sophisticated supply chain systems, used products may re-enter the supply chain at any point where residual value is recyclable. In order to manage the Supply Chain it is necessary to oversee the whole Supply Chain and the decisions one can make in here. That is the basis for Supply Chain Management.
Supply Chain symptoms
In many organisations this role is underutilised and companies tend only to have a closer look when problems arise. We can see if Supply Chain Management is underutilised by looking at the following symptoms:
• High inventory
• High number of DC transfers
• High spend for expedited freight
• High capital costs
• Poor order-fill rates
• Poor customer service
• Customer complaints
If these symptoms occur we know that we have underutilised our Supply Chain Management. The sum of Local Optimization is not as good as Total Optimization
Supply Chain Management
Total optimisation is reached with the introduction of Supply Chain Management. Supply chains link value chains and to manage this process requires Supply Chain Management, because that delivers meeting customer expectations within a controlled cost manner. Within this process one needs to understand that decisions to keep on stock, to produce, or to bundle all have an effect on customer satisfaction and costs. With the right set of tools and guidelines this process can be managed in such a way that it meets your expectations, both for customer satisfaction and cost controlled.
Our approach to Supply Chain Management
In order to improve Supply Chain performance we take the 2-step approach: analyse and act-upon. We first need to know what the root cause is for the symptoms. From there we can design an improvement programme that implements tools and changes behaviour. Read more about our Approach