Supply Chain Planning
Supply chain planning includes demand forecasting, inventory simulation, manufacturing planning and transportation scheduling. While supply chain planning is part of enterprise strategic planning, supply chain execution is part of managerial and operational control.
Supply chain planning involves the following aspects.
1. Demand Forecasting:
An important success factor to supply chain management is accurate demand forecasting. Sophisticated mathematical models can be used for predicting future demand from historical data.
2. Inventory Simulation:
Inventory simulation estimates appropriate stock levels from historical inventory data. When a discrepancy occurs in the eco computer system, inventory specialists need to reconcile the discrepancy.
3. Manufacturing Planning:
Manufacturing planning is concerned with the co-ordination of all manufacturing activities. It tries to achieve the optimal use of raw materials, manufacturing equipment and skilled labours based on orders placed by individual customers.
4. Transportation Scheduling:
Transportation scheduling epitomises the use of resources in shipping raw materials from suppliers to manufacturers and in delivering of finished goods from manufacturers to distributors and customers. Transportation planning module or manufacturers to distributors and customers. Transportation planning module of SCM utilizes linear and / or non-liner programming from Operations Research to ensure the delivery of materials and goods at right time, to right place at a minimal cost.
Supply Chain Execution
Planning is considered a part of enterprise strategic planing. On the other hand, supply chain execution is about managerial and operational control. Supply chain execution is the process of putting supply chain planning into action.
Supply chain execution involves the following.
1. Order processing:
In supply chain execution, order processing involves order placement, order confirmation, order fulfilment and order inquiry. Supply chain management software has build-in capability that allows both workers and trading partners to easily place orders. Orders are confirmed by e-mail notifications and on-line confirmation. Users can easily lookup their orders status on-line.
2. Production & Assembly:
In manufacturing or production phase, raw components are assembled into final products or raw materials are manufactured into finished goods. Workers perform products or raw materials are manufactured into finished goods. Workers perform activities such as kitting, packaging and labelling work for specific products. Manufacturing involves production, testing, packaging and preparation for delivery.
3. Distribution:
After manufacturing, products or services are to be delivered to distributors or to final consumers. Distribution involves warehousing, delivering, invoicing and payment collection. Distribution management is integrated with transportation planning and scheduling.
4. Return:
Handling return and refund is important part of supply chain execution. Lack of planning and logistics for processing return or refund have been a common problem in supply chain execution. Supply chain management systems should have infrastructure in place for receiving defective and excess products back from customers.
Supply Chain Collaboration
Successful implementation of a supply chain management system improves the efficiency of collaboration between suppliers, manufacturers and distributors the collaboration of material flows, information flows and financial flows.
1. Collaboration of Material Flows:
The move of raw materials and components in the supply chain is a two-way traffic. It involves the move of physical product flowing from suppliers, manufacturers, and distributors to customers through the supply chain, and the move of products from consumers to distributors, and manufacturers as a result of product returns, recycling or disposal.
2. Collaboration of Information Flows:
The smooth flow of information within a supply chain facilities supply chain planning, which involves demand forecasting, inventory simulation, manufacturing planning, and transportation scheduling.
3. Collaboration of Financial Flows:
Along with the move of physical product and order transmission, supply chain collaboration involves the settlement of financial transaction such as credit card information, purchase order, payment schedules and title ownership arrangements.
4. Collaboration of Workforce Flows:
The breed of Supply Chain Management tools helps the collaboration of workforce across the entire supply chain. For instance, some companies are focusing on workforce management in manufacturing processes. Software applications are designed to maximally utilize the skills of employees across the supply chain.
