The supply chain is a term that is used to refer to the movement of goods, financial resources and information from the producer to the consumer. Intermediaries (wholesalers and retailers) are often part of the chain as well. Supply chain management (SCM) is the act of overseeing this process and making sure that the movement is seamless. The process will be deemed as being effective if there will be a reduction in inventory.
Each of the goods and services making up the chain serve an important function to the entire process. Product flow simply refers to the transfer of goods (or services) from the producer to the consumer. Information flow relates to the act of transmitting orders and subsequently updating clients on the status of these orders as they are moved. Financial flow refers to aspects such as payment schedules, consignments, credit arrangements and so on.
In a bid to make the process more efficient, most SCM firms have adopted the use of web based applications. The applications that are used here are of two main types: those used for planning and those that make execution possible. Planning applications are designed as algorithms that help in the filling of orders. Execution applications, on the other hand, help in product tracking, management of various materials as well as the relevant financial information.
One of the most commonly used data plans is what is termed the open data model. With this plan, data is shared between different departments in an enterprise as well as between enterprises doing business with each other. Information is stored in data warehouses that will be typically located in different companies. The act of sharing data has been demonstrated to significantly reduce the time-to-market of products.
Another important change that a company needs to undertake so as to realize the benefits of SCM is to shift from the management of individual functions to integrated functions. The collaboration involves the various departments within a company as well as suppliers, clients and product developers among others. For instance the purchasing department has to communicate with the marketing department to establish the number of units of a product to be bought.
There has been pressure coming from various quarters aimed at ensuring that companies use sustainable SCM models. Sustainability relates to different aspects of business such as economic, social and environmental. Research has shown that the carbon footprint contributed by supply chains could be as much as 75% of the total contribution of an average company. Many companies are, for this reason choosing suppliers that are environmental conscious at the expense of those that are not.
Supply chain managers need to be certified to increase their chances of securing employment opportunities. The first step in this regard is to acquire the relevant skills and knowledge in all the relevant areas. Such include, for example, transportation, warehousing of goods, inventory management and business continuity skills among others. Most countries have professional bodies that take care of the registration process.
The supply chain exists in almost every type of business. There is a need to have it managed properly so that the products and information can move from the supplier to the consumer and in the reverse direction with more efficiency. One of the most important ingredients that ensure this happens is the existence of effective communication between the players involved.
Each of the goods and services making up the chain serve an important function to the entire process. Product flow simply refers to the transfer of goods (or services) from the producer to the consumer. Information flow relates to the act of transmitting orders and subsequently updating clients on the status of these orders as they are moved. Financial flow refers to aspects such as payment schedules, consignments, credit arrangements and so on.
In a bid to make the process more efficient, most SCM firms have adopted the use of web based applications. The applications that are used here are of two main types: those used for planning and those that make execution possible. Planning applications are designed as algorithms that help in the filling of orders. Execution applications, on the other hand, help in product tracking, management of various materials as well as the relevant financial information.
One of the most commonly used data plans is what is termed the open data model. With this plan, data is shared between different departments in an enterprise as well as between enterprises doing business with each other. Information is stored in data warehouses that will be typically located in different companies. The act of sharing data has been demonstrated to significantly reduce the time-to-market of products.
Another important change that a company needs to undertake so as to realize the benefits of SCM is to shift from the management of individual functions to integrated functions. The collaboration involves the various departments within a company as well as suppliers, clients and product developers among others. For instance the purchasing department has to communicate with the marketing department to establish the number of units of a product to be bought.
There has been pressure coming from various quarters aimed at ensuring that companies use sustainable SCM models. Sustainability relates to different aspects of business such as economic, social and environmental. Research has shown that the carbon footprint contributed by supply chains could be as much as 75% of the total contribution of an average company. Many companies are, for this reason choosing suppliers that are environmental conscious at the expense of those that are not.
Supply chain managers need to be certified to increase their chances of securing employment opportunities. The first step in this regard is to acquire the relevant skills and knowledge in all the relevant areas. Such include, for example, transportation, warehousing of goods, inventory management and business continuity skills among others. Most countries have professional bodies that take care of the registration process.
The supply chain exists in almost every type of business. There is a need to have it managed properly so that the products and information can move from the supplier to the consumer and in the reverse direction with more efficiency. One of the most important ingredients that ensure this happens is the existence of effective communication between the players involved.
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