The first step consists of 3 parts:
After planning, the next step is sourcing. Sourcing determines vendors who will procure products and services to meet actual/planned demand most efficiently and economically. Sourcing can be of both perishable and non-perishable goods. For perishable products, it is recommended to have the least possible supplier’s lead time to encourage a minimal inventory approach. However, for non-perishable products, the number of days for inventory to reach zero levels must be higher than the supplier’s specified lead time so that you can’t get a loss in revenue.
As per the preference and requirements of the customer, the company will perform all the activities from the transformation of raw material to the end product. Activities like assembling, testing, and packaging happen at this step. Positive feedback from customers creates a win-win situation for both the end-user and the manufacturer. The most metric-intensive step of the supply chain management process is the making stage, where companies can assess the quality levels, production results, and employee productivity.
The fourth most crucial step of the supply chain management process is the delivery stage, where the goods are finally delivered to the destined location of customers by the supplier. This stage is considered the logistics phase where companies collaborate for the order’s receipt from customers, establish a warehouse network, pick carriers to deliver the goods, and receive payments by setting up an invoicing system. Sometimes, firms outsource the delivery process from other companies who can oversee home delivery or special handling requirements.
The next step of the supply chain management process is the returning phase. In this step, defective or damaged products are returned by the customers to the supplier. This step is considered a problematic section for companies as they have to respond to customer’s complaints and queries. It’s essential for supply chain managers to establish a flexible and responsive network to handle defective, damaged, and different products returned by the customers and facilitate the return process.
To operate effectively, supply chain management requires several support processes to monitor all the information throughout the process and assure compliance with proper regulations. Enabling step includes HR, finance, IT facilities, product design, sales, portfolio management, and quality assurance.
Supply chain management is affecting every facet of modern firms. Continuous evolution is the new norm today. Whether facing digital disruptors or technology, the transformation in skillsets or changes in operating models, supply chain executives are certain: the traditional ways will not position them as a leader. Without effective supply chain management practices, firms will eventually end up losing business and disappointing customers. Companies that efficiently utilize the power of supply chain management will overtake their toughest competitors and become leaders in their field.