Supply Chain Strategy
Supply Chain Planning
Supply chain planning should be done according to the demand and supply point of view. To understand the demands of customers, a market research should be done. The second thing to consider is the awareness and updated information about the competitors and strategies used by them to meet their customer’s demands and requirements.
As we know, different markets have different demands and should be dealt with from a different point of view. This phase encompasses all this, starting with forecasting market demand to which markets the finished goods will be provided, which plants are planned in this phase. All the participants or employees involved with the company as much as the whole process
Efforts should be made to make it as flexible as possible.
The Supply Chain Decision phases is considered successful if it performs well in short-term planning.
Supply chain Operation
The third and final Supply Chain Decision phases consists of various functional decisions that must be made immediately within minutes or hours or days. The purpose behind this decision phase is reducing uncertainty and performance optimization.
Starting with handling customer orders to supply the customer with that product, this stage covers everything. For example, imagine a customer demanding an item manufactured by your company. Initially, the marketing department is responsible for taking the order and forwarding it to the production department and the inventory department.
The production department then responds to the demand of the customer by sending the demanded item to the warehouse through the appropriate order and the distributor sends it to the customer within the time limit.
All departments engaged in this process are required to work with the aim of improving performance and reducing uncertainty.
SCM – Performance Measures
- Qualitative measures: for example customer satisfaction and product quality.
- Quantitative measures: for example, order-to-delivery lead time, supply-response time, flexibility, resource utilization, distribution performance.
- Non-financial measures
- Financial measures
- Supply chain lead time
- Order-to-delivery lead time
Customer service level
- Order Filling Rate: Order filling rate is part of customer demands that can be easily satisfied with available stock. For this part of customer demands, there is a need to consider supplier lead time and manufacturing lead time. Order filling rates can be in relation to a central warehouse or field warehouse or stock at any level of the system.
- Stock out Rate: This is the inverse of the order fill rate and marks the portion of an order lost due to a stock out.
- Backorder Level: This is yet another measure, a gauge of the total number of orders waiting to be filled.
- raw material
- In the process, ie the incomplete and half-finished section
- finished goods inventory
- spare parts
- Manufacturing resources: Include machines, material handlers, equipment, etc.
- Storage resources: Combine warehouses, automated storage and recycling systems.
- Logistics resources: attach trucks, rail transport, air-cargo carriers, etc.
- Human resources: consisting of labor, scientific and technical personnel
- Financial resources: include working capital, stock etc.
- Raw material cost.
- Revenue from goods sold.
- Activity-based costs such as material handling, manufacturing, rates To collect, etc.
- Inventory holding cost
- Transportation costs
- Cost of perishable goods
- For incorrectly filled or late orders to customers penalty
- For incorrectly filled or late delivery from suppliers credit
- Cost of goods returned by customers
- Credit for goods returned to suppliers
In short, we can say that the financial performance index can be merged as one using important modules such as activity-based costing, inventory costing, transportation costing and inter-company financial transactions.
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