Executives often ponder over what all does Supply Chain Management (SCM) cover, and how would SCM-benefits and SCM-efficiency deliver the requisite ROI (return on investment).
Let’s look at two definitions of SCM … a) What is SCM and b) What is its objective (both picked from Wikipedia):
What is SCM?
The INTEGRATION OF KEY BUSINESS PROCESSES across the supply chain for the PURPOSE OF CREATING VALUE FOR CUSTOMERS AND STAKEHOLDERS (Lambert, 2008) (Cooper et al., 1997)
What is the objective of SCM?
“Supply chain strategies require a total systems view of the links in the chain that work together efficiently to create customer satisfaction at the endpoint of delivery to the consumer. As a consequence, COSTS MUST BE LOWERED THROUGHOUT THE CHAIN BY DRIVING OUT UNNECESSARY EXPENSES, MOVEMENTS, AND HANDLING. The main focus is turned to efficiency and added value, or the end-users perception of value. EFFICIENCY MUST BE INCREASED, AND BOTTLENECKS REMOVED.” (Hines, T. 2004:p76)
Objectives and requirements of your company may vary, depending upon their bottlenecks / pain-points, focus points, process maturity, technology prowess, etc.
** The MAIN PURPOSE is to IDENTIFY THE BOTTLENECKS, and DRIVE EFFICIENCY, while LOWERING OVERALL COSTS. **
This should be one of the FOCAL POINTS for SCM consultants, SCM Technology, and Supply Chain Management software.
SCM Coverage Span :
SCM consultancy, SCM software, and technology cover vast grounds (as per various needs), some of which are enlisted below:
Warehouse Management System
… WMS software
Advanced Inventory Management
… Inventory Tracking
… Inventory Control
… Inventory Optimization
3PL – Third Party Logistics
Cold Chain Logistics
Shipment and Dispatch Planning
YMS – Yard Management System
Logistics and Distribution Management
… DMS – Dealer Management System
TMS – Transportation Management System
RMS – Retail Management System
MES – Manufacturing Execution System
… PPC – Production Planning and Control
… Production Scheduling
Supplier Relationship Management
… VMS – Vendor Management System
Outsourcing and Partner Management
… Tracking Assets
… Asset Maintenance
… Demand Management
MRP – Material Requirements Planning
CRM – Customer Relationship Management
… Complaint Management System
Many of the above-mentioned aspects are INTERCONNECTED
** A SMOOTH and LOOSELY COUPLED INTERCONNECTION of the Supply Chain elements enlisted above HELPS in DRIVING THE OVERALL EFFICIENCY of SCM, and GENERATES SUBSTANTIAL ROI (Return on Investment) to the company. **
PS: The SCM software should have in-built INTEGRATION FRAMEWORKS for integrating Existing software(s) and hardware/firmware / PLC systems (as per need).
SCM systems may be integrated with :
- ERP deployed in your company (like SAP, Oracle / JD Edwards / PeopleSoft, Microsoft Dynamics NAV / Navision, Sage, IFS, etc.)
- E-commerce Orders and Dispatch-confirmations
- Multi-channel Sales
- Unified Commerce System
- Accounting system
- Other systems being used like
- AGVs – Automated Guided Vehicles
- Conveyor Belts
- PLCs, Sensors
- RFID – Radio-frequency Identification
- GPS (Global Positioning System)
- IPS (Indoor Positioning Systems), etc.
In our subsequent articles, we shall subsequently touch upon some details and nuances of various enlisted aspects.
Would be good to hear from you regarding your Supply Chain Challenges.
Feel free to leave your comments.