Enhancing supply chain management should be the unifying goal of every component within the manufacturing industry. It is improbable that aspects and strategies that were previously effective for your supply chain will continue to be so in the near future. Read on to discover everything there is to know about characteristics of supply chain management and to become a subject matter expert on it.
Globalization has made the process increasingly complex, raising competition and demand standards while eliminating corporate borders. E-commerce, exacerbating the situation, has grown rapidly, erasing geographical and temporal restrictions. Its popularity surged during the virus outbreak as many changed their shopping habits and behavior.
Characteristics of Supply Chain Management
Suppliers strive to establish streamlined and cost-effective supply chains through the implementation of supply chain management (SCM). The supply chain encompasses each stage, from the procurement of raw materials to the delivery of completed goods, and even implements the computer systems required for comprehensive tracking. The characteristics of supply chain management includes the following:
Clear
Decision “clear” was preferable to “transparent” on account of the omission of a “T” in the supply chain designation. Transparency encompasses considerably more than the mere ability to monitor the whereabouts of finished products and components as they move through the supply chain. It is crucial to differentiate the degree of transparency exhibited by the internal and external supply chains of an organization. By the term “internal transparency,” I refer to the manner in which information and products traverse the purchasing, manufacturing, shipping, and vending operations.
On the contrary, supplier visibility is a critical element of supply chain transparency in relation to external perspectives. Government regulations, such as the Modern Slavery Act in the United Kingdom, are beginning to influence the way in which companies interact with their suppliers. Visibility across a supplier network is increasingly seen as essential, not optional. Supply chain efficiency improves with transparent practices internally and externally.
Agile
The capability to adjust is critical for the attainment of success by a supply chain. Since entire books devote themselves to studying this topic, a few paragraphs in a blog post will not suffice to convey the significance of this attribute. Conversely, supply lines that operate efficiently can swiftly adapt to alterations in the overall working environment. Alongside an effectively designed risk assessment program, they collaborate, utilize intelligent decision support technology, and operate under the influence of customer demand.
Leadership
In order to establish an exceptional supply system, it is imperative to have robust leadership. Those in charge of the transportation network must understand and have the ability to influence the “big picture” objectives of the organization. Additionally, they must be capable of conveying to the supply chain team the significance of these objectives. As a consequence, the ability to effectively collaborate with others in a team environment is critical. Executives must openly voice concerns and be ready to chair C-level meetings if the supply chain lacks representation. The supply chain leader must ensure the function is seen as crucial for both cost control and value creation strategy development.
Punctual
The distinction appears to be self-evident. It is indisputable that the competition will possess the capability to fulfill customer demands more rapidly. Amazon and similar companies boast 30-minute home deliveries, influencing the logistics sector. While not essential for all wholesalers, timely deliveries epitomize effective supply chains in our fast-paced culture.
Planning
Effective supply chain planning no longer relies on Excel and similar spreadsheets. Instead, it utilizes intelligent cloud-based enhancement add-ons and enterprise resource planning (ERP) software. As mentioned in my previous post highlighting Beet Fusion, it is now possible to execute supply chain management and inventory planning duties in the cloud. The majority of the planning for these duties consists of “when” rather than “if” circumstances. Employing operations research to analyze historical data enables organizations to enhance the quality of purchasing decisions and optimize the quantity of safety stock. Additionally, these technologies aid managers in identifying optimal inventory storage locations, thus optimizing product delivery to customers. Software is readily available to assist managers with procedure planning; it is merely awaiting implementation.
Networking
As the person responsible for online marketing, I must raise this during supply chain maintenance talks. Besides corporate events, blogs, social media, and podcasts offer current insights to stay updated. Establishing a forum for suppliers to exchange best practices or crafting social media tutorials fosters better relationship management. Those aiming for excellence should leverage modern technology enabling instant global communication.
Youthful
Two definitions of the term “youthful” are presented here. Part of the solution consists of educating and recruiting youthful individuals with expertise in supply chain management. A supply chain organization that is currently performing exceptionally well may not maintain that level of excellence in the future if its subsequent generation of leaders does not receive appropriate mentoring and training.
Concerning the supply chain strategy, the term “youthful” in its second element is appropriate. Have you maintained the utilization of the Excel spreadsheets that were previously furnished for the purpose of planning? Have you been deliberately avoiding technological advancements that enable early adopters to accomplish more? Subsequent to this, attaining achievement will be considerably more arduous.
Innovative
Regarding a novel supply chain as one of the most optimal increases supply chain vulnerabilities. Recent technological advancements appear to be occurring with greater frequency than in the past. To stay competitive and excel, many organizations are integrating innovative concepts into their supply chain operations. Examples include using smart glasses for warehouse picking optimization, employing beacons for production oversight in factories, and implementing geo-fencing to enhance vehicle delivery time slot management Consider this list non-exhaustive; it merely showcases a few innovative applications of supply chain management implemented across industries.
Honest
Alternatively, “honest” may be used in place of “ethics.” Customers are beginning to recognize that organizations must consider the “how” of supply chain systems. Numerous businesses have incurred financial losses and suffered reputational damage as a result of their participation in frauds that utilized child or slave labor. A strategy that can be implemented to prevent such issues is to acquire items in a dependable manner.
Nestle’s transparency about its dealings with a Thai seafood supplier using forced labor has sparked discussion in supply chain management. Initially, most businesses would have attempted to avoid the spotlight; however, Nestle developed a strategy to improve working conditions for everyone in the Thai fishing industry, admitted its error, and came forward with a plan to do the same. It was abundantly obvious that this remark, in conjunction with the determination to alter, substantially enhanced the organization’s standing. Supply chain excellence therefore necessitates an ethical and honest work environment.
Unified
I intend to convey that when I refer to supply chain management as “unified,” I am referring to its completeity. Seamless collaboration and communication among supply chain stakeholders, including procurement, production, distribution, and sales, are imperative. Effectively cultivating a culture of success requires dismantling organizational obstacles and ensuring that the appropriate individuals are collaborating. Insisting on evaluating specific functions using metrics that fail to contribute to the broader context will negatively impact the overall performance of the organization.
FAQ
What is the Primary Goal of the Supply Chain?
The principal objective of supply chain management is to ensure that all items, from raw materials and components to finished goods, are transported as economically and efficiently as feasible, from the manufacturing center to the end user.
What are the Reasons Behind a Failed Supply Chain?
Multiple potential risks exist in relation to the supply chain. External factors such as natural disasters, fires, pollution, criminal activities, political instability, labor strikes, market disruptions, legal disputes, and the advent of industry-displacing technologies are all potential sources of such issues.
What do Supply Chain Managers Perform on a Daily Basis?
A supply chain manager is tasked with the following daily responsibilities: coordinating and organizing events to minimize costs and maximize efficiency in the transformation of raw materials and service inputs into finished goods and services for end users; negotiating the transfer of resources and their transformation into finished goods;
Final Remarks
We refer to the infrastructure and procedures used to transport products from manufacturers to consumers as a supply chain. The organization’s core operation involves acquiring raw materials, transforming them into intermediate and final products, and distributing these products to consumers. Supply chain management, utilizing science and technology, aids businesses in sourcing necessary ingredients, improving manufacturing efficiency, and facilitating product delivery to consumers. We’ve explained this in characteristics of supply chain management guide. I hope this information was useful to you. To dive deeper into components of supply chain management topic, read more about it in this extensive research paper.
