Definition
A Supply Chain, as opposed to Supply Chain Management (SCM), is the network of all individuals and organizations linked by the creation and sale of a product, from the delivery from supplier to manufacturer through its delivery to the ultimate customer. Supply Chain Management is the management of such a chain.
History
With manufacturing abilities developping significantly in the 90s, managers realized that “…material and service input (MIPS)* from suppliers had an impact on the organization’s ability to meet consumer standards”. This led managers and organizations to put an emphasis on not only producing a product, but actually getting such product to the consumer in an efficient cost friendly way.
In other words, organizations have increasingly found that they must rely on effective supply chains, or networks, to compete in the global market and networked economy.
*The MIPS concept can be used to measure eco-efficiency of a product or service.
Types of Supply Chain Management
Choosing to apply a Supply Chain Management to your business is a crucial first step to take. The next is to choose the adequate model that can drive the SCM. Overall, we count six of these models.
犀利士 Continuous Flow Model
The most traditional model of SCM.
This is the perfect model for companies that operate with stability, in other words, mature industries. These companies will produce a uniform set of goods with little variation and expect a level of stability from the market.
Agile Model
This is for the companies with unpredictable demand (or customer order products), dealing with specialty items that may require extra care.. The model is known for the expertise required to transport goods from different points and not so much on technology of the whole process.
Fast Model
This is for the companies that are new to supply chain strategies and plan on producing lines with short life cycles. Using this model, the company would want to exploit a trend, produce goods quickly and make sure the product is sold before it’s out of trend.
Flexible Model
This is for companies impacted by seasonality.
The Flexible Model can handle high demand during peak seasons then adjust to periods with low demand.
Efficient Model
For companies competing in industries with very tight profit margins. In order to stay relevant and on top of the chain, a company might want to get ahead by making its supply chain management the most efficient. The end goal here is to maximize efficiency.
Custom Model
This model is a mix of agile and continuous flow methods with a product that might require a bit of customization.
Steps to Supply Chain Management
Supply chain management, overall, has five key elements—planning, sourcing raw materials, manufacturing, delivery, and returns. But a key characteristic of SCM is its flexibility, especially from one business model to the other; which is why, the steps to SCM can differ from company to company, depending on the current needs.
Goals and Obstacles
One key goal of a well-designed and maintained supply chain for a product is to successfully build the product at minimal cost. Such a supply chain could be considered a competitive advantage for a firm.
Put simply, SCM is there to ensure minimum cost and maximum efficiency.
There are obviously other goals for SCM, like optimizing transportation and logistics, enhancing customer satisfaction, increasing flexibility and maintaining better coordination.犀利士 p>
However, the main issues of concern to SC managers have been identified as capacity/resource availability, talent (in terms of recruitment), complexity, threats/challenges (supply chain risks), compliance and cost or purchasing issues. Frequent changes in regulation have also been identified as a concern.
Furthermore, complexity within supply chains has been highlighted in Supply Chain Digest and by Gartner, a research and consulting firm based in Connecticut, as a recurring challenge.
We can help You
Supply Chain Management is an essential part of any business process, because it helps achieve business objectives in the most efficient way. It has a long history of change and adjustment, with companies using different models according to their needs.
At Pangea Logistics Solutions, we do not only offer our services of Supply Chain Management for shipments and cargo, but we extend our expertise, flexibility and a guarantee for efficiency.
