The administration of operations involved in the procurement of raw materials, their transformation into completed items, and their distribution to the ultimate customer is referred to as supply chain management (SCM).
The most basic supply chain consists of your suppliers, you, and your customers. Most industrial businesses, on the other hand, have a more complex supply chain that comprises several vendors and even outsourced operations.
A proper supply chain management system will benefit any firm as it attempts to streamline the processes found at each level of the supply chain to ensure that consumers receive the appropriate amount of the right goods at the right time. When you can keep your promises, you are more likely to secure future business and preserve your competitive advantage in the market.
Good supply chain management ensures that demand and supply are balanced. Supply chain management must be effective to eliminate waste, enhance profits, reduce expenses, and assure product delivery on time. Understanding the five supply chain management functions is critical for manufacturing firms since it will provide insight into how to improve the efficiency of their operations. As a result, these are the five supply chain management functions.
Five Supply Chain Management Functions
The following are the five functions of supply chain management:
1. Purchase
Purchasing is the first role of supply chain management. Raw materials are necessary for the manufacturing process to manufacture items and products. These materials must be obtained and delivered on time for production to commence. To avoid any delays, communication with suppliers and delivery firms will be essential.
2. Administration
Demand planning and forecasting are normally required before resources can be purchased, as the demand market dictates how many units to be produced and how much material is needed for manufacturing. This function is critical in supply chain management because firms must accurately estimate demand to avoid having too much or too little inventory, which results in revenue losses. To avoid such errors, demand planning and forecasting must be integrated with inventory management, production, and shipping.
3. Transportation
Logistics is a component of supply chain management that coordinates all parts of planning, purchasing, production, warehousing, and transportation to ensure that products reach their final destination without incident. It is beneficial to have good communication between departments so that products may be sent to customers swiftly and at the lowest possible cost.
4. Resource Administration
Production necessitates the use of raw materials, technology, time, and labor. Resource management ensures that the appropriate resources are distributed to the appropriate activities efficiently and effectively. This will ensure that an efficient production schedule is produced to maximize operational efficiency. When assessing available capacity, examine the capabilities of each resource and whether they can do the job that has been scheduled for them. This ensures that you aren't over-promising orders and that your manufacturing plan is both achievable and precise.
5. Workflow of Information
All of the other activities of supply chain management rely on information exchange and distribution to function properly. The entire chain may fall apart if the information workflow and communication are weak. Increased visibility and communication can help to prevent many supply chain disruptions. Having a uniform system that all departments utilize will ensure that everyone is working with the same set of data, reducing miscommunications and the time spent updating everyone on new developments.
Any manufacturing business must comprehend the five supply chain management functions. Many firms around the world, however, are struggling to keep up with the quickly changing expectations and problems of supply chain management.
By offering detailed insights into your production operations, Advanced Planning and Scheduling (APS) Software can assist in the coordination of these five functions.
Visual production scheduling will automatically notify you of any material shortages or capacity bottlenecks, allowing you to resolve issues before they arise. The inventory plan will assist you in keeping track of when supplies and pieces arrive, as well as tracking supply increases and declines for each item.
Manufacturing businesses that want to take their business to the next level, enhance production efficiency, and gain control of their supply chain management should consider installing Advanced Planning and Scheduling software.
Software for Advanced Planning and Scheduling (APS)
Advanced Planning and Scheduling Software have become necessary for modern manufacturing processes as customer demand for larger product assortment, faster delivery, and lower cost pressures has increased. These solutions save planners time while increasing agility in updating constantly changing priorities, manufacturing schedules, and inventory plans. APS Systems can be readily connected with ERP/MRP software to solve gaps in planning and scheduling flexibility, accuracy, and efficiency where these systems fall short.
You can use APS to:
Make optimized schedules that strike a balance between production efficiency and delivery performance.
Increase revenue by increasing throughput on bottleneck resources.
To reduce inventory, synchronize supply and demand.
Make resource capability available to the entire firm.
Allow for scenario-based data-driven decision-making.
Implementing Advanced Planning and Scheduling (APS) Software will take your manufacturing operations to the next level of efficiency by leveraging the operational data you already have in your ERP system. APS is a step in the right direction for increasing efficiency and lean manufacturing operations. Try out a free trial or demonstration!