The supply chain management consists of various processes to achieve its desired objectives. These processes are briefly explained below.
1. Demand Planning and forecasting
Accurate demand forecasting is considered one of critical success factors in supply chain management. Supply chain software systems often utilize sophisticated mathematical models for predicting is largely dependent on how abnormal data is treated in the demand forecasting. Demand forecasting is an ongoing process. Supply of chain management systems can generate warnings at different invervals according to user preference, whether it is on a weekly or monthly basis.
2. Procurement
Procurement is the process of choosing the suppliers that will deliver the goods and services that needed to manufacture or assembly products or to create services. It involves price negotiation, receiving, and verifying the shipments. Supply chain management systems can be integrated with industry - specific B2B exchanges to automate the procurement processes.
3. Manufacturing and Assembly
Raw components are assembled into final products or raw materials are manufactured into finished goods. Manufacturing involves the activities of production, testing, packaging and preparation for delivery.
4. Distribution
Products or services are finally delivered to consumers. This requires distribution. Distribution involves warehousing, delivering, invoicing and collection of payments.
5. Return
Return and refund are other important aspects of supply chain management and also the problematic aspect of it. Supply chain management systems should develop sufficient infrastructure for receiving defective and excess products back from customers.
