Notes
- decreases production costs: Any delay in
Supply Chain
- A supply chain is also a network between a
company and its suppliers to produce and
distribute a specific product to the final
buyer. This network includes different
activities, people, entities, information, and
resources. The supply chain also represents
the steps it takes to get the product or
service from its original state to the
customer.
- Supply chain management involves the
management and integration of flows of
goods, services and information into the
company to create the goods and services
that will then flow out of the company to its
customers.
Basic Supply Chain
- The figure shows three entities: A supplier,
producer, and a customer.
- The supplier provides materials, energy,
services, or components for use in producing
a product or service.
- Producers that receives services, materials,
supplies, energy, and components to use in
creating finished products, such as dress
shirts, packaged dinners, air-planes, electric
power, legal counsel, or guided tours.
- Customers that receive shipments of
finished products to deliver to its customers,
who wear the shirts, eat the packaged
dinners, fly the planes, or turn on the lights.
b) Importance of Supply Chain
Supply chain management has the power to boost
customer services, reduce operating costs, and lastly,
improve the financial standing of a company
Boost customer services
- Customers can expect the correct product
assortment and quantity. Not only that,
customers can expect products to be
available at the right location, delivered on
time and serviced quickly.
Reduce Operating Costs
- decreases purchasing costs
production can cost a company tens of
thousands of dollars.
- Lastly, it decreases the total supply chain
cost.
Improve Financial Standing of a company
- it increases profit leverage for it helps
control and decrease supply chain
expenditures. It also decreases fixed assets
and also increases cash flow
COMPONENTS OF A SUPPLY CHAIN
MANAGEMENT
- Sourcing - which is the process of finding,
evaluating, and engaging suppliers to
provide goods and services to a business.
- Demand planning. It is used to develop the
business case in which the accuracy of the
demand forecast becomes more important as
a new product goes to market.
- Warehousing and transportation - are
huge components of a supply chain and
could be huge tasks for companies to handle.
For typical companies, a distribution center
is used as a warehouse or storage facility for
the products. This is also used on processing
and moving goods on to wholesalers,
retailers, or consumers.
- Logistics - is a later part of the components
of a supply chain. It is the physical
movement of goods and is considered to be
the most important component in a supply
chain. It keeps track of all the information
from the initial order forecast to production,
warehousing, and transportation of goods
and products
Elements
There are four main elements of supply chain
management. These elements are integration, operations,
purchasing, and distribution.
Integration - Integration could be considered the brains
and heart of the supply chain. integration means
coordinating communications between the rest of the
supply chain to produce effective and timely results.
Operations - The operations in the supply chain
coordinate the specifics of day-to-day operations for the
company. It plans the company’s output to make sure
everything is running well and that advantages are
maximized.
Purchasing - Purchasing is another element of the
supply chain management which sources the materials,
products, or other goods needed to generate the
company’s products.
Distribution - Distribution involves planning along with
logistics and delivery of services or products. The more
detailed function includes packaging, storing, handling,
shipping/ handling of a product to an end-customer, etc
Data Required
A supply chain may have areas handling the
manufacturing process and time information, inventory
control policies information, procurement and logistics
information, demand.
Manufacturing process and time information require
four kinds of data which are manufacturing process data,
calendar data, machine data, and bill of material
structure. Manufacturing process data contains the
process time, queue time, setup time, number of
machines in each process, and alternate route.
Inventory control policies information handles the
safety stock level, reorder point, inventory level of
finished products, raw material and intermediate parts,
and any stock location on the shop floor.
Procurement and logistics information contains the
supplier lead-time, supply lot size, supplier capacity,
procurement horizon, and procurement time.
Demand information has the data of due date, priority,
start and end data, and demand pattern.
Lastly, the policies or strategies information contains
the order control policies or dispatch policies
I/O Devices
The devices used for the integration and purchasing
element are the basic input and output devices which are
smartphones, computers, and printers.
For the integration element, one can use the computer
to explore new software or other technological means to
foster communications among departments. It is also
used to make sure that things are happening on time and
on the budget.
While for the purchasing element, one can use the
computer, smartphone to buy the needed materials,
products, or other goods needed to generate the
company’s products.
A device that can be used for the operations element is
a barcode scanner. The barcodes can make inventory
stock taking an efficient process and it can update
accurate inventory levels in real-time. Process: A
barcode scanner is used to read the barcode, and the
information encoded by the barcode is read by the
machine. This information is then tracked by a central
computer system. For example, a purchase order may
contain a list of items to be pulled for packing and
shipping. The inventory control system can serve a
variety of functions in this case. It can help a worker
locate the items on the order list in the warehouse, it can
encode shipping information like tracking numbers and
delivery addresses, and it can remove these purchased
items from the inventory tally to keep an accurate count
of in-stock items
A device that can be used for the distribution element is
radio frequency Identification (RFID). By tagging cases,
cartons, containers or individual items, a company can
read the tags as the goods are placed into a shipping
container and confirm exactly what is in each container,
and that it matches what is supposed to be in it. Process:
This can be accomplished by staging the goods and
reading the tags via a handheld interrogator, or by setting
up a portal around the shipping bay. Information about
what is in the container can then be written to an active
tag that identifies that particular container. The active tag
might also have a GPS or CPRS transmitter in it, so it
can communicate its location via satellite or the cellular
network.