By coordinating every step required to transport a product from the manufacturer to the consumer, the supply chain serves a logistical and strategic purpose. Alternatively stated, it encompasses the entirety of the manufacturing process, commencing with the procurement of raw materials and concluding with the sale of the finalized product. This requirement extends beyond the procurement of essential basic materials to include the distribution of the finished product to the client. As a consequence, the supply chain comprises each stage of the following: production, storage, transportation, and delivery. It is critical that all elements in the chain collaborate. Check out these functions of supply chain management to enhance your knowledge.
Supply chain management organizes interconnected operations to meet customer needs, cut costs, and boost competitiveness. Previously, individuals actively involved in operations resolved supply chain challenges. Today, we understand the supply chain as a precise network delivering products efficiently.
Functions of Supply Chain Management
Supply chain management (SCM) defines the administration and coordination of the procedures entailed in the production and distribution of products and services. Also, the process begins with transporting raw materials and extends to managing inventories, finished product transit, and storage. Effective supply chain management has the potential to increase efficiency, reduce expenses, and elevate consumer contentment. Here is an overview of functions of supply chain management with a detailed explanation for your convenience.
Logistics
Supply chain management involves organizing, executing, and supervising commodity movement. So, it coordinates the movement of products, services, personnel, and equipment for storage. Transporting and organizing these assets are components of the procedure. The term “logistics,” initially denoting the transportation of provisions and weaponry to deployed military personnel, was first documented in the military.
Customer Service
Throughout the purchasing procedure, direct communication takes place between a consumer and a sales representative of the company selling the product. So, this is referred to as “customer service.” Retailers are largely in agreement that maintaining customer satisfaction and fostering repeat business is most effectively achieved through personal interaction. Also, as a customer service representative, one of your numerous responsibilities will be to manage inquiries, refund requests, and complaints.
Transportation
Transportation includes everything associated with the movement of people or goods from one location to another, as well as the various methods by which this is accomplished. One component of this function is the transportation of products between different locations. The concept of “transportation” extends to visa-free and international travel.
Production
You will be responsible for managing the production process in this role, which includes supervising the tasks, equipment, and personnel involved. Production is the process of integrating various elements, both tangible and conceptual, with the intention of generating a novel entity. If everything unfolds as intended, the anticipated result is a highly esteemed product or service that enhances people’s lives.
Distribution
Distribution management oversees the movement of merchandise from manufacturer to retail. So, it entails logistics planning, inventory management, storage, and supply chain administration. The primary responsibility is delivering ordered products to customers. This consists of responsibilities such as order processing, order transmission, and order delivery.
Inventory Control
Additionally, the responsibility entails monitoring inventory levels to ensure sufficient quantities are available to satisfy customer requests while minimizing service expenses. Inventory control, also referred to as stock control, entails monitoring the merchandise of a retail establishment. Inventory management is the procedure through which an organization ensures it maintains an appropriate supply level.
Continuous Improvement
The primary objective of this function is to enhance and optimize the efficacy of supply chain operations through the implementation of novel technologies, processes, and best practices. Whether it be processes, products, or services, it is perpetually seeking to improve. Continual development is an alternative term for this. We have the option as a species to either make “breakthrough” advancements simultaneously or “incremental” advancements incrementally.
Planning
Activities such as procuring materials, producing finished products, coordinating their delivery, monitoring their development, and distributing them to clients are all within the agenda. Critical to the planning process is the deliberation of the sequential actions required to accomplish a given objective. Mental foresight, or the capacity to mentally traverse chronological time, serves as the fundamental basis for the capability of strategic planning. So, popular opinion holds that the capacity to anticipate or strategize was one of the most significant accomplishments in human history.
Quality Assurance
You will be responsible for quality control in this position to ensure that the products and services offered to customers are satisfactory. Also, the process of ensuring that each and every component used in production reaches or exceeds expectations is known as quality control.
Storage Management
Storage management consists of all the procedures and instruments used to monitor the hardware, software, and resources that comprise a data storage system. Also, supervising the building’s operations, which includes organizing and relocating supplies and furniture, is part of your job description.
Sourcing
Supplier identification and selection is one of the responsibilities of this function. Strategic purchasers prioritize lowest total cost over lowest item price. Sourcing, the start of the supply chain, involves selecting required products and services. Sourcing also encompasses purchasing, which entails selecting a supplier, negotiating a contract, and monitoring the performance of your providers.
Acquisition
This includes procuring products and services from various vendors. The procurement process consists of the acquisition of goods and services; it is a strategic initiative. So, it is distinct from purchasing in that it encompasses a number of operational tasks that businesses typically perform to achieve their objectives, including production, inventory, and transactions.
FAQ
Why is it Critical to have a Functioning Supply Chain?
Modern supply chains make necessities more affordable, elevating living standards. A streamlined supply chain expedites the distribution of manufactured products to retailers and, ultimately, consumers for this reason.
What are the Enablers for Scm?
“Employee commitment,” “benchmarking,” and “an appropriate performance matrix” were the three most significant contributors to the realization of this opportunity. Moreover, customer service excellence, competitiveness, and organizational success are all enhanced through supply chain management (SCM), which involves the administration of supply chains.
Which Sort of Supply Chain is Best Suited to Supplying Functional Products?
Novel products require a flexible supply chain capable of adapting to changing circumstances, whereas functional commodities require a network that optimizes the use of existing resources (Fisher, 1997). The primary objective of a streamlined supply chain is to efficiently and economically fulfill a foreseen demand.
Final Remarks
Supply chain management involves supervising and coordinating various operations to ensure continuous provision of goods and services. Also, SCM includes planning, logistics, inventory management, transportation, warehouse management, quality control, procurement, production, compliance, cost control, distribution, and customer service. Each function is vital for efficient supply chain operation and customer satisfaction. We hope you found this tutorial on SCM functions helpful. For an insider’s perspective on principles of supply chain management subject, read this with a leading expert.
