Supply Chain Management - Maintaining a Global Competitive Edge

 

    

 At the same time, information in real-time has become a critical component while, in some cases, adding to supplier costs. Striking the balance between optimizing the supply chain and a natural tendency not to share too much data is the goal of effective supply chain management.

By increasing the visibility of the supply chain, suppliers and customers become more integrated partners through improved coordination and more "trust" among the parties. Working together can and should result in less risk to the parties and a better distribution of profits.

The end result should be improved inventory management which translates into inventory based on demand rather than "expectations" and reduced costs because inventory and production are more closely aligned with the objectives of "just-in-time" manufacturing.

Effective supply chain management provides a vehicle to optimize processes, production, availability, flexibility and responsiveness. Inventories are reduced, lead-times are shortened significantly and transportation and production are optimized as part of the process which begins with planning, intelligent sourcing, manufacturing, logistics (delivery) through to any returns if difficulties arise with the end product.

Companies today are looking inward and outward; focusing on their core competencies while outsourcing anything which can be done better and more cost effectively by others. The only way the overall process can be done efficiently is through the exchange of information; information which benefits all concerned. The information flow will result in better control of all the processes involved.

The most common global practice is to divide supply chain management into three main flows:

Product, Information and Finance

Product flow is simply the process of getting the products from the supplier to the customer. Information, the key link in the chain, involves sending and receiving orders and providing timely updates on the status of deliveries. Financial flow covers all the issues relating to payment and title including terms and schedules of payments. If you loved this article and you would like to obtain far more info about Riskpulse.com kindly pay a visit to our website.

Clearly, the benefits of supply chain management outweigh the costs and risks for all parties to the transactions. Implementing SCM can be done within existing ERP software or as independent, distinct SCM software which should be able to communicate with any existing ERP software and/or web based information utilities.

Today there are a number of web based procurement utilities that can accomplish most, if not all, of a company's goals for SCM with relative ease of implementation. Most of these tasks have been maintained manually. Companies should also consider inexpensive process software (and process consultants) which can assist in evaluating current processes, costs as well as help identify redundant processes since this will lead to more efficient and cost-effective operations.