Supply Chain Management: Guidelines and Resources

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Sections of this topic

    Supply Chain Management: Guidelines and Resources

    Copyright, Carter
    McNamara, MBA, PhD

    This topic in the Library is written especially for those new to SCM. It also
    aims to include nonprofits and small businesses in its scope. As you read this
    topic, think about the activities of a certain product or service that you know
    about, or are even involved in developing or providing to customers. Before
    reading this topic, you might read about the Relationship
    Between Managing Supply Chain, Operations, Quality, Customer Relationships and
    Customer Service
    .

    Sections of This Topic Include

    What is Supply Chain Management?

    You Are Probably Part of a Supply Chain
    What is Supply Chain Management (SCM)?
    SCM Is Best Managed as a System
    SCM is for Any Type of Organization
    Problems With Ineffectively Managed Supply Chains
    Many Benefits of High-Quality SCM

    Planning Your SCM

    Characteristics of High-Quality SCM
    Develop Your SCM Team Now
    Use SCOR© Model to Plan Your
    SCM?
    Establish SCM System Goals
    Decide Any Organizational Changes
    Use Push or Pull Drivers to Manage Your Supply Chain?
    Partner With Others to Operate Your SCM?
    Select the Best SCM Software

    Developing Your SCM

    Redesign Your Organization As Needed for SCM
    Delegate QMS Goals to Teams and Employees
    Train Your Employees About SCM Systems and Management

    Managing Your SCM

    Three Levels of Managing in SCM
    Chain of Management Processes in SCM
    Strategic Planning Process
    Demand Planning Process
    Supply Planning Process
    Procurement Process
    Manufacturing Process
    Warehousing Process
    Order Fulfillment Process
    Distribution Process
    Customer Service Management
    Customer Relationship Management
    Manage These Flows Through Your Supply Chain
    Managing Risk Management in Your SCM
    Managing Safety and Security in Your SCM
    Managing Ethically and Social Responsibility
    in Your SCM
    Evaluating Your SCM Performance

    General Resources

    Additional Overviews
    Certifications
    Glossaries
    Organizations

    Also consider
    Customer
    Relationship Management
    Customer Service
    Management
    Operations
    Management
    Product
    and Service Development

    Related Library Topics


    WHAT IS SUPPLY CHAIN MANAGEMENT?

    You Are Probably Part of a Supply Chain

    What is a Supply Chain?

    If you work in an organization that produces tangible offerings (products)
    and/or intangible offerings (services) to customers, and if you are involved
    in any the following organizational activities, then you are part of a supply
    chain:

    1. Strategic planning about what market, products and services are provided
      by the organization
    2. Estimating what the consumer needs (forecasting demand) will be for those
      products and services
    3. Making sure there will be sufficient resources (materials planning) to meet
      that demand
    4. Identifying who will supply those resources (who will be the suppliers)
    5. How you will buy (or procure) them
    6. How you will get the resources into your organization (these are matters
      of inbound logistics)
    7. How you will build (or manufacture) them
    8. How you will store (or warehouse) all of them (that is, how you will inventory
      them)
    9. How you will get the products or services delivered to the customer , for
      example, sold directly or through a retailer (these are matters of distribution
      and outbound logistics)
    10. How you will ensure the product or service meets or exceeds the customer’s
      expectations (matters of customer service and customer relationship management)

    NOTE: All of the activities and terms in the above parentheses are the typical
    sequential components in a supply chain.

    Other Definitions of a Supply Chain

    This is sometimes where readers start to get overwhelmed and confused when
    reading about supply chains and SCM. If they have heard of the more common topic
    of logistics, then descriptions of supply chains can seem even more confusing.
    However, Intek
    Freight and Logistics, Inc
    provides a very useful description of a supply
    chain, as well as how it differs from logistics:

    “To sum up logistics and supply chains, think of a football game where
    logistics is the game on the field of play and the supply chain is the stadium
    where the game is played.

    From the game perspective of the analogy, the movement of the ball up and
    down the field of play to deliver a score is logistics.

    The stadium, on the other hand, represents all the physical and communication
    components. Think of the massive amounts of money put into a professional
    football stadium to deliver the best experience for the buying customers (the
    fans). There is the stadium itself, plus the communication points between
    coaches in the box to coaches and players on the field. The communication
    network allows calls, still pictures and replay videos to execute to the highest
    levels to score points and have the customers standing on their feet cheering
    for more.

    The feedback mechanism of scoreboards, referees, replay screens, and for
    those really into the game, radio commentators (providing play-by-play and
    overall game analysis), give feedback all along the way through a scoring
    drive to assist in delivering the very best results.”

    Here is another perspective: “The supply chain is probably one of the
    more complex systems that all managers have to be knowledgeable about. Its broad
    coverage, which includes entire organizations, people, information, various
    activities and all other resources that play a role in the flow of products
    or services from producers to suppliers to customers to end users. This complexity,
    coupled with its dynamic nature, calls for a way to keep that flow going in
    such a way that facilitates and does not, in any way, hinder the operations
    of the business. This discipline is called supply chain management.” Anastasia
    in Cleverism

    What is Supply Chain Management (SCM)?

    Definitions of SCM

    SCM involves numerous management activities and components in the supply chain.
    Therefore, it is useful to consider a couple of careful definitions of SCM.

    • The Council
      of Supply Chain Management Professionals (CSCMP)
      defines SCM: “Supply
      chain management encompasses the planning and management of all activities
      involved in sourcing and procurement, conversion, and all logistics management
      activities. Importantly, it also includes coordination and collaboration with
      channel partners, which can be suppliers, intermediaries, third party service
      providers, and customers. In essence, supply chain management integrates supply
      and demand management within and across companies.”
    • “Supply chain management (SCM) is the discipline that manages supplies
      and processes through all of the stages of a project, product or business
      deliverable. Business material has a journey as it moves from one state to
      the next until it’s ready to be delivered to the customer or stakeholder.
      Then there’s the logistics of taking the finished product from one place
      to another. Getting through these various stages efficiently requires control—that’s
      where supply chain management comes in.” ProjectManager

    How SCM Compares to Logistics, Operations Management and ERP

    Now you have read the various definitions of SCM. If you have any acquaintance
    with logistics, operations management and enterprise resource planning, then
    the four practices might seem so similar as to be confusing. However, they are
    actually different from each other.

    SCM Compared to Logistics?

    Logistics is often considered to be the storage and transportation of goods
    and services. The flow of those resources can be from their input to the organization
    to the customer, and backwards from those end points, for example, in the case
    of customer returns. Thus, logistics is a component of the supply chain.

    SCM Compared to Operations Management

    Operations management is concerned with ensuring high-quality effectiveness
    and efficiency of a broader range of operations throughout the organization
    than SCM. For example, operations management puts more focus on meeting strategic
    goals, coordination of various departments and personnel across the organization,
    and typically on management of more facilities than those directly involved
    in SCM.

    SCM Compared to ERP

    Note that SCM is also different than Enterprise Resource Planning (ERP). The
    activities of SCM include ensuring timely and cost-effective transportation
    of goods and materials into the organization, as well as outside of the organization
    and ultimately to the customer. (These are matters of logistics.)

    Thus, SCM often collaborates with a variety of external organizations, for
    example, suppliers, manufacturers and transporters. As a result, SCM also focuses
    on the quality of relationships with those types of organizations. In contrast,
    ERP focuses exclusively on activities within the organization. Its focus is
    also much more on detailed activities, than on broad relationships.

    Operations
    Management and Supply Chain Management: Understanding the Nuances
    Supply
    Chain Management vs. Operations Management
    The
    Differences Between Logistics, Operations and Supply Chain Management

    Also see
    Operations
    Management
    Product
    and Service Development

    SCM Is Best Managed as a System

    A system is a recurring cycle of activities, including:

    1. Planning to determine goals and how they can be achieved, and
    2. Then developing and managing resources and activities to achieve those goals,
      and
    3. Then evaluating whether the goals have been achieved or not, and
    4. Then using the learning from the evaluation to improve the quality of the
      next round of planning.

    Thus, a system is a recurring loop of components (the supply chain) — in a
    continuous cycle of improvement.SCM is best planned and managed as a system;
    otherwise, the management tends to be highly reactive and sporadic, often resulting
    in a patchwork of disconnected and ineffective activities.

    SCM is for Any Type of Organization

    Service Organizations

    The sequence of activities listed in the previous section, You
    Are Probably Part of a Supply Chain
    , is referred to as the “supply
    chain”. Many of the articles about SCM refer to the manufacturing products
    in larger organizations. However, if you work in a service industry, think about
    how each of the listed activities applies to your own organization.

    For example, if your organization offers consulting services, then your organization
    still needs strategic planning and demands planning to clarify what types of
    services will be provided to whom, and what the demand for those services might
    be.

    It still needs to be sure there are sufficient personnel (resources) with certain
    expertise who can be hired (procured) and provided (supplied) to your organization,
    as well as what it will cost to get those resources (transported) to your organization.
    It still needs to plan how to organize and train (develop) them, as well as
    how to maintain (store) them until they are put into use (delivered) to the
    clients.

    Small Organizations

    The managing of the activities through the supply chain — the supply chain
    management (SCM) — applies to small organizations, as well. The supply chain
    and the management of the supply chain are likely to be more complex than in
    a large organization.

    However, it could be argued that SCM is just as important to the health of
    the small organization because, for example, the poor development and delivery
    of products and services to customers could pose a significant threat to the
    life of the organization.

    In small organizations, there are often far fewer resources to rapidly identify
    and solve organizational problems, while also attending to customer needs. There
    is often far less money to hire expertise to help, as well. Problems in the
    supply chain often result in more dissatisfied customers and less revenue —
    another problem that small organizations cannot afford.

    Nonprofit Organizations

    A common misconception is that nonprofits are very small organizations that
    primarily offer services, and that they are seldom the types of large manufacturing
    organizations so often written about in the SCM literature.

    However, the primary difference between a nonprofit and a for-profit is just
    that the nonprofit dedicates its financial resources exclusively toward meeting
    some social need, while a for-profit aims to accomplish a profit that can be
    allocated back to the owners or shareholders.

    Otherwise, many nonprofits provide products to their clients, much as for-profits
    do. Actually, a small nonprofit is much more like a small for-profit in nature
    than a large nonprofit. Similarly, a large nonprofit is much more like a large
    for-profit in nature than a small nonprofit. See
    How
    Nonprofits Differ From For-Profits – and How They Are the Same

    Problems With Ineffectively Managed Supply
    Chains

    Many organizations reactively evolve some version of a supply chain over time.
    They piece together the necessary parts of the supply chain as they need them.
    They might even evolve to a fairly complete supply chain, but still not manage
    it as a tightly integrated and aligned system of components that needs to continually
    be managed and adjusted for maximum efficiency to meet customer demands, while
    reducing unnecessary costs and overhead. As a result, these organizations expose
    themselves to experiencing:

    • Insufficient resources (inventory) to meet customer needs
    • Excess, costly inventory of unused resources
    • Increasing stress and conflicts among personnel trying to do more with less
    • Poor quality products and services
    • Products and services for which there is little customer demand
    • Decreasing amounts of customers
    • High turnover among employees
    • Decreasing sales and profits

    Many Benefits of High-Quality SCM

    The overall benefits of proactively, systematically managing SCMs are numerous
    and can include:

    • More efficiency in operations, resulting in decreased operational costs
    • Improved understanding of customers’ needs, resulting in more demand for
      products and services
    • Increased focus on the customer, rather than on the organization itself,
      resulting in improved customer service
    • Faster product development and production, resulting in increased volume
      of products and services for customers
    • Increased sales and decreased expenses, resulting in more profitability
      for businesses and more community impact for nonprofits

    Top
    5 Benefits of Supply Chain Management Software That will Double Your Business
    Benefits
    of Responsible Supply Chain Management
    Key
    7 Advantages and Benefits of Supply Chain Management
    Primary
    Business Benefits of Supply Chain Management
    The
    Benefits of Integrated Supply Chain Management


    PLANNING YOUR SCM

    Characteristics of High-Quality
    SCM

    Before you progress in planning your SCM, it might be useful to get an idea
    of what high-quality SCM’s look like and operate like. We turn to Intek
    Freight and Logistics, Inc
    , this time for a listing of the characteristics
    of a high-quality SCM.

    1. Consistency – be great all the time
    2. Horizontal and vertical integration – it should be difficult to see where
      one component of the chain stops and other begins
    3. Technology – continually invest in best technologies
    4. Value network design – inbound and outbound activities all focused on the
      end customer
    5. Data-driven – the amount of available and useful data is substantial —
      use it
    6. Proactive use of data – always think about how you can use the data
    7. Customization and flexibility – especially with communications and delivery
      to customer
    8. Prepare for unexpected – regularly think of potential disruptions to the
      supply chain and what to do about it
    9. Sustainability – increasingly, stakeholders want to see this value in their
      providers of goods and services
    10. Compliance – stay up to date and comply with relevant laws and regulations
    11. Transparency – nothing goes unnoticed and everything is communicated
    12. Integrity – governance and executives should ensure ethical activities
      throughout the supply chain

    Global Logistics
    / Supply Chain Best Practices
    10
    Best Practices You Should Be Doing Now
    Best
    Practices for Optimizing Supply Chain Management
    Supply Chain
    Best Practices from 10 Leading Companies
    The
    Essential Guide to Supply Chain Management Best Practices

    Develop Your SCM Team Now

    The planning and implementation of an SCM system requires sufficient time,
    energy and expertise, as well as a variety of different perspectives. That means
    a well-qualified and designed SCM Team of the most suitable members from your
    organization. The SCM Team would make recommendations to management about, for
    example:

    • Goals for the SCM system
    • Metrics to measure progress toward the goals
    • The best approaches to train employees about SCM
    • Criteria to select the best SCM system
    • The best SCM system that meets the criteria

    It is best to draft a job description for the SCM Team to be used when explaining
    the SCM Team’s role to upper management and suggesting who should be on
    it. The description also gives guidance and direction to the SCM Team as its
    doing its job. It is often best, as well, to train the members of the SCM Team
    about quality management. That might suggest hiring an expert to do that training,
    as well as to being a resource to the SCM Team as it does its job.

    Also see
    Hiring
    Consultants

    Team
    Building
    Team
    Performance Management

    Use SCOR©
    Model to Plan Your SCM?

    The SCOR model is widely used in planning SCM systems. Your SCM Team choose
    this approach. The approach includes five overall stages, including:

    1. Planning – includes, for example, decisions about aligning the supply chain
      with strategic goals, building versus buying, outsourcing, and activities
      across the supply chain.
    2. Sourcing – includes, for example, decisions about cost-effectively procuring
      needed materials from the right suppliers, and always getting the materials
      in good condition
    3. Making – includes, for example, decisions about facilities, activities and
      scheduling to effectively produce goods and services
    4. Delivering – includes, for example, activities to store goods and services,
      fulfill orders, and distribute goods and services to the customer
    5. Returning – includes, for example, authorizing returns, transporting defective
      products, and replacing products or refunding fees

    5
    Essential Stages in Developing a Successful Supply Chain
    The
    SCOR Model for Supply Chain Strategic Decisions
    Basics
    of Supply Chain Management

    Establish SCM System Goals

    Identify Relevant Organizational Goals

    Your organization should have done strategic planning to clarify its overall
    purpose and priorities for the coming years. Ideally, the planning was done
    proactively and explicitly. The priorities are usually specified in terms of
    strategic goals.

    Strategic goals related to the SCM might be, for example, regarding what products
    and services will be offered, as well as when and where. Planning might have
    also specified the value proposition of the organization, which specifies the
    value that customers get from using the organization’s products and services.
    Planning might have also specified certain financial goals to achieve, such
    as reducing expenses by a certain amount or raising revenues by a certain amount.
    Supply Chain
    Strategy: Back to Basics
    Supply
    Chain Strategy and Business Strategy

    Also see
    Strategic Planning
    How to Do to Planning
    Goals
    and Objectives Should Be SMARTER

    Identify SCM Goals and Align with Organizational Goals

    Here is an example of an SCM strategic
    plan
    that gives examples of SCM goals, including as derived from a strategic
    SWOT analysis. The article Defining
    the Supply Chain
    gives a useful overview of examples of SCM goals and associated
    objectives. The article mentions goals, including to achieve efficient fulfillment,
    drive customer value, enhance organizational responsiveness, build network efficiency
    and facilitate financial success.

    The above are examples to help you with your thinking. However, your SCM goals
    should be derived from your own organization’s strategic priorities. For each
    SCM goal, associate various milestones, or key performance indicators, of progress
    that you are making progress toward achieving the goal. (For ideas of goals,
    consider various metrics
    for evaluating your SCM.)
    Align
    Your Supply Chain With Your Business Goals
    Six
    Steps to Align Supply Chain with Corporate Strategy
    Supply
    Chain Metrics: Make Sure They Are Aligned with Your Strategy!

    Also see
    Action
    Planning and Operational Planning

    Strategic
    Action Plans & Alignment

    Be Realistic In Your Planning

    Especially if yours is a small to medium-sized organization, or if this is
    your first time in being focused and intentional about quality management, then
    be very realistic about what you can accomplish. Develop a plan with various
    phases to be implemented over a realistic period of time. Build in some quick
    accomplishments in order to sustain excitement and motivation to implement the
    plan. Be willing to change the plan while implementing your quality management
    during its first year.

    Also see
    How to
    Do to Planning

    Decide Any
    Organizational Changes

    A conventional rule in deciding the structure of something is “form follows
    function.” In other words, the structure of the organization (its design
    and roles) should be to what is most useful in implementing the organization’s
    functions (its goals and methods to achieve those goals).

    So what departments, teams and employees are now — and should be — involved
    in SCM, including to use the SCM software? What goals should each department,
    team and various employees have in SCM? What SMART objectives should be associated
    with each goal?
    Organizational
    Structures and Design
    Work
    Design and Job Design

    How to Know What
    Positions and Jobs Are Needed

    Use Push or Pull Drivers to Manage
    Your Supply Chain?

    Push and pull are two different approaches to managing supply chains. It is
    important early on when planning and designing a supply chain to decide which
    of the two approaches is best for the organization and its customers.

    In the push approach, goods and services are “pushed” through the
    supply chain to the customer. The push approach starts by forecasting the demand
    for the goods and services, and then making sure the supply chain effectively
    operates to meet that expected demand. So the effectiveness of the approach
    depends very much on the accuracy of the forecasts.

    The pull approach starts from relying on actual customer demands in order to
    forecast the necessary supplies and any changes needed in the supply chain in
    order to promptly meet those demands. So the effectiveness of this approach
    depends very much on the supply chain promptly learning and meeting the demands
    of the customers.

    What
    is Push and Pull Strategy in Supply Chain Management?
    Push-Pull Strategy
    Push
    vs. Pull in Your Supply Chain…What’s the Difference?

    Partner With Others to Operate Your SCM?

    There can be numerous types of other organizations that can work with your
    organization to help operate your supply chain. So your organization must closely
    manage its relationship with each of those other organizations. This includes
    clarifying the roles and responsibilities of each, establishing complete and
    accurate contracts and agreements, monitoring the performance of each, and evaluating
    the usefulness of each relationship.

    RedStag
    Fulfillment
    lists some types of partners in this order:

    • Vendors – that produce and provide raw materials
    • Producers – that organize, assemble and/or manufacture products and services
    • Warehouses – that store, monitor and organize products and materials
    • Distribution centers – that collect, manage and provide products and services
    • Retailers – that sell products and services to customers via various different
      methods

    Partnerships
    to Improve Supply Chains
    Supply
    Chain Partnerships Or Supply Chain Management?
    Establishing Supply Chain
    Partnerships
    Supply
    Chain Collaboration
    Managing
    Relationships in the Supply Chain

    Also see
    Team
    Building
    US
    Business Contracts

    Select the Best SCM Software

    What Type of Software Platform is Best?

    On-premises

    In this type, you install the SCM software on your computer system, as well
    as maintaining, troubleshooting and updating the software. You would either
    use one of the free SCM tools or buy or license a tool from a vendor.

    This type of software installation works best if you have available ongoing
    technical skills for installation, troubleshooting and upgrades. You also will
    need considerably more time to install the software as you climb the often steep
    learning curve to understand the software and its installation. You are likely
    to face occasional periods of downtime of the software as problems are solved
    and upgrades are installed.

    Cloud-based

    In this type, you subscribe or license the software from a vendor that makes
    the software available to one or more people in your organization, depending
    on the licensing agreement. The vendor manages all aspects of the software,
    including installation, testing, training, troubleshooting and upgrades. This
    works if you have a suitable budget. Fortunately, the price of SCM software
    has continued to decrease over the years.

    How to Select the Right SCM Software

    Questions to Consider When Specifying Your Software Requirements

    Itarian
    lists a variety of questions to consider, including:

    1. Is it suitable for your size of organization?
    2. Are there any limitations to the number of users?
    3. Is it easy to use?
    4. Can it be integrated with your other computer systems?
    5. Is it easy to integrate with other supply chain management solutions that
      you already use?
    6. What are its security features against hackers’ attacks?
    7. Is the software affordable and fits in your budget?

    You should also consider:

    1. What type of SCM software do you need?
    2. What type of technical support does the vendor provide? How reliable is
      it?
    3. Does the vendor provide training?
    4. Does the vendor include a careful manual for implementing the software?
    5. Does the vendor provide demonstrations that your employees can experience?
    6. What are some of its customers saying about the software?

    Specify the Requirements for the Software

    Now you are ready to specify what you want the SCM software to accomplish for
    you. It is best to write a software requirements specification (SRS), while
    focusing now on the needs of your organization, and not on the particular software
    tool that you might already prefer. Later on, you will take your SRS to the
    various SCM software vendors for you to carefully decide if their software will
    indeed meet your organization’s needs.
    Requirements
    & Features of Supply Chain Management

    Sample
    SCM Software Requirements Specification (scroll down the page)

    Lists of Some SCM Software and Costs to Consider

    Supply
    Chain Management Software
    13
    Essential Types of Supply Chain Management Tools
    Types of Supply Chain
    Management Software
    Top
    15 Supply Chain Management Software
    Top
    10: Supply Chain Management Software Companies

    Free SCM Software

    5 Open Source
    Software Tools for Supply Chain Management

    For Small Organizations

    Supply
    Chain Management Software for Small Businesses

    For Nonprofits

    Nonprofit organizations have supply chains, especially those focused on providing
    services. There seems to be an increasing number of for-profits organizations
    providing services. Thus, SCM software for businesses might also accommodate
    nonprofit organizations, so it certainly is worth contacting software vendors
    to ask if their software works for nonprofits.

    Supply Chain Solutions
    for Disaster Relief Organizations

    Now Select the Best Software For Your Needs

    You are in a great position now to begin working with various vendors to get
    the best software to meet your needs, as specified in your SRS. You might include
    your specification in an overall Request for Proposal (RFP). You also might
    bring the members of SCM Team with you when talking to the vendors.
    5
    Tips for Choosing Supply Chain Management Software
    How
    to Choose Supply Chain Management Software
    How
    to Select the Best Supply Chain Management Software For Your Business
    Supply
    Chain Management Software Selection
    Selecting
    A Supply Chain Management System

    Also see
    4
    Reasons Business Contracts Fall Apart
    US
    Business Contracts


    DEVELOPING YOUR SCM SYSTEM

    Redesign Your Organization As Needed
    for SCM

    Consider the goals and objectives that you established during the SCM planning
    for each department, team and employee associated with customer relationship
    management. What teams and roles should exist? How should they be integrated
    with each other? For example, which departments, teams and employees should
    be collaborating with each other and how? What organizational design would best
    facilitate that type of involvement and collaboration?
    Requirements
    for Successful Organizational Change

    Understanding Organizational
    Structures and Design

    Organizing
    or Reorganizing an Organization and Its Employees

    All of the activities within an organization occur within the context of organizational
    performance management. Thus, having a basic understanding of that overall process
    will also give you an understanding of the major recurring activities in an
    organization and the general order in which they occur.
    Organizational Performance Management

    Delegate SCM Goals to Teams and Employees

    Consider the SCM goals and associated objectives that you decided during the
    planning. Which goals should be delegated to which teams and employees? Make
    sure that you make the assignments according to the team performance management
    and employee performance management practices that are formally established
    in your personnel policies.
    Goal
    Setting with Employees — What Should Employees Work On?
    Team
    Performance Management: Performance Planning Phase (Assigning Goals
    )

    Also see
    Personnel
    Policies

    Train Your Employees About
    SCM Systems and Management

    Operating a high-quality SCM system requires well developed knowledge and expertise
    among employees. Depending on the employees role in the system, required skills
    can planning, organizing, leading and coordinating resources. It can include
    supervising, communicating and evaluating. It can include planning, monitoring,
    measuring and analyzing. Therefore, arrange highly practical trainings for your
    employees — trainings that match their busy schedules and trainings that include
    practice sessions.
    Supply
    Chain Education: What Skills Do Your Staff Need?
    The
    Importance of Supply Chain Training to Improve Your Business’ Bottom Line
    Skills
    for the New Era of Supply Chain Management – A Look to the Future

    Also see
    About
    Training and Development


    MANAGING YOUR SCM

    Three Levels of Managing
    in SCM

    It helps to get clearer perspective on managing SCM if you look at it as having
    the following three general levels that must continually get attention when
    managing a supply chain.

    Strategic Level

    Strategic planning involves clarifying the organization’s overall purpose and
    long-term priorities. Specific to a supply chain, strategic decisions answer,
    for example, what is our unique value to our customers, what sets us apart from
    our competitors and what are our values in serving our customers. It also answers
    what are our strategic priorities for the next few years, for example, to expand
    marketshare, increase profits, expand community impact or improve quality?

    Also see
    Strategic
    Planning

    Operational Level

    Where the management activities in the strategic level answer “What will
    we be doing?”, management activities at this level show how we will be
    doing it. Examples include designing and structuring the organization, getting
    and organizing the best people to address the strategic priorities. It also
    includes managing each of the components in the supply chain, as well as the
    important flows of information, finances, products, values and risk management
    across the supply chain.

    Also see
    Operations
    Management

    Tactical Level

    This level includes the many recurring day-to-day tasks necessary to operate
    the components in the supply chain. There are many examples, such as following
    policies and procedures to work with suppliers, doing timely and cost-effective
    procurements, transporting goods and supplies to and from the organization,
    tracking and monitoring resources in warehouses and communicating with personnel
    across the supply chain.

    Also see
    Three
    Levels of Supply Chain Management

    3
    Step Beginner Guide to Supply Chain Planning
    The
    Ultimate Guide to Supply Chain Management

    Chain of Management Processes
    in SCM

    It is clear that SCM spans different management processes. Predictive
    Analytics Today
    suggested items 1-8, below, as being the “building
    blocks” of SCM.

    1. Strategic Planning Process

    This involves planning and specifying the strategic supply chain design. This
    might be done as part of the overall strategic planning process, which would
    also specify which products and services are provided and to which groups of
    customers.
    Strategic Planning
    Introduction
    to Strategic Supply Chain Management
    How
    To Do Strategic Supply-Chain Planning

    2. Demand Planning Process

    This involves planning how customer needs (demands) will be accurately and
    usefully forecasted, and how those forecasts will be communicated especially
    to the supply planning process.
    What’s
    the True Definition of Demand Management?
    Demand-Chain
    Management
    Lessons
    in Demand Management

    3. Supply Planning Process

    This involves planning how to ensure sufficient resources (raw materials, components,
    expertise, etc.) to develop into needed products and services. This also includes
    managing for effective supplier relationship management.
    Supply
    Planning: Processes, Options & Analytics, Oh My
    5
    Steps to Connected Supply Chain Planning
    Who
    Loves Ya?? Demand Planning or Supply Planning? (Part 1)

    4. Procurement Process

    This involves ensuring timely and cost-effective purchases of sufficiently
    needed resources, including finding (or sourcing) the resources, coordinating
    the most cost-effectiveness purchases, and accurately administrating the purchases.
    Procurement
    Processes in Supply Chain Management
    Driving
    Procurement Process Benefits in 4 Different Ways
    Procurement

    5. Manufacturing Process

    This involves regularly manufacturing goods by combining, integrating and aligning
    the supplies in a timely and cost-effective manner. It means accurately scheduling
    these production activities in close coordination with the forecasted rate of
    sales to customers. It means always conducting careful quality control to ensure
    products will always meet or exceed expectations of customers. In the case of
    service organizations, this process would include equipping personnel and materials
    to deliver services when needed.
    How
    Does Supply Chain Management Affect Manufacturing Companies?
    Manufacturing
    and Supply Chain Management Solutions
    Manufacturing Supply Chains

    Also see
    Quality
    Control

    Quality
    Control Techniques

    6. Warehousing Process

    This involves transporting, organizing, storing, tracking and monitoring raw
    materials needed for products. (This in-bound transporting to the organization
    is sometimes considered to be part of the procurement process.) This can also
    include doing the same activities for produced products and services. This all
    must be done in timely, cost-effective and reliable manner.
    About Warehousing
    Warehousing
    Efficiency and Effectiveness in the Supply Chain Process
    11
    Warehouse Operations Best Practices

    Also see
    What
    is Inventory Management?
    What
    is Inventory Management?

    7. Order Fulfillment Process

    This involves ensuring accurate sales order pricing, processing and billing,
    as well as orderly and efficient packaging — or provision — of products and
    services to customers. Depending on the nature of the products and services,
    this can include highly customized and expensive packaging or provisioning.
    It can also include arranging necessary warranty and optional customer service
    agreements.
    Secrets
    to Successful Order Fulfillment
    Order
    Fulfillment, Logistics and Supply Chain Management
    Order Fulfillment

    8. Distribution Process

    This involves planning and ensuring timely and cost-effective distribution
    of products and services to the customers (that is, outbound logistics), including
    the same activities in reverse order if products are returned by the customers
    or if customers are not satisfied with the quality of services.
    The
    Role of Distribution in the Supply Chain
    Distribution
    Channels and Supply Chain Management in High-Tech Markets
    Logistics
    and Distribution Models

    9. Customer Service Management

    This includes ensuring high-quality service and support to customers before,
    during and after your customers buy from you. It includes answering customers’
    questions about products and services, and can include handling customers’ complaints.

    Customer Service
    What
    is Customer Service?
    10 Types
    Of Customers Services – Customer Service Channels

    10. Customer Relationship Management

    This involves the ongoing activities to ensure high-quality relationships between
    the organization and its customers. Thus, this also includes the activities
    to ensure great customer service management.
    Customer
    Relationship Management
    The Three
    Phases of CRM
    Understanding
    the Four Key Customer Relationship Stages

    Manage These Flows Through Your Supply Chain

    When trying to grasp the nature of activities through the supply chain, it
    helps to see them as different types of flows through the supply chain. That
    type of perspective can make it much easier in recognizing what needs to be
    managed and how. The direction of the flows depends on whether you had selected
    a push or pull approach to your management activities. When reading the following,
    you might think of the major processes in a supply chain, including:

    1. Strategic processes
    2. Demand processes
    3. Supply processes
    4. Procurement processes
    5. Transportation to organizations
    6. Manufacturing processes
    7. Inventory management
    8. Transportation/distribution to customers

    Product Flow

    This includes the development and movement of goods and services all the way
    from suppliers to customers. Thus, the timing of those activities in a particular
    supply chain component affects the timing of activities in the chain’s upcoming
    components, as well. The flow and affects are in reverse order in the case of
    returns from the customer.

    Financial Flow

    The costs of the supply chain tend to increase as activities proceed through
    the supply chain. Thus, the cost of a particular supply chain activity affects
    the available funds for the upcoming activities in the supply chain, as well.

    Information Flow

    There should be a constant flow of useful and timely information throughout
    the supply chain. Thus, the accuracy and timeliness of information in a particular
    supply chain activity affects the quality of information in the upcoming activities
    in the supply chain, as well.

    Value Flow

    The value of products and services increases through the supply chain. Thus,
    the value produced by a particular supply chain activity affects the value in
    the upcoming activities in the supply chain, as well.

    Risk Flow

    Risk can be any kind of disruption to activities in the supply chain, for example,
    breakdowns of machinery, suddenly unavailable materials, poor quality materials,
    or poor performance of personnel. A sudden disruption in an activity at any
    point in the supply chain becomes a disruption to the upcoming activities in
    the supply chain, as well.

    The
    Five Major Flows in Supply Chain
    Managing
    Supply Chain Flows
    Supply
    Chain Management – Process Flow

    Managing Risk Management in Your SCM

    Risk management is attempting to identify and then manage threats that could
    severely impact or stop the supply chain. Generally, this involves reviewing
    the supply chain, identifying potential threats and the likelihood of their
    occurrence, and then taking appropriate actions to address the most likely threats.

    With the recent increase in rules and regulations, employee-related lawsuits
    and reliance on key resources, risk management is becoming a management practice
    that is every bit as important as financial or facilities management.

    As written above, risks to the supply chain can include, for example, sudden
    breakdowns of machinery, unavailability materials, poor quality of materials
    and poor performance of personnel. Risk management should be applied to all
    components in the supply chain. Disruption at any point in the chain should
    be planned for and contingencies should be planned accordingly.
    Supply
    Chain Risk Management
    Supply
    Chain Risk Management (SCM)
    Five
    Techniques to Manage Supply Chain Risk

    Also see
    Risk
    Management

    Managing Safety and Security in Your SCM

    Safety and security are major concerns of today’s supply chain managers. The
    supply chain is comprised of numerous moving parts, ranging in size from unpacking
    containers, driving transport vehicles to constructing production facilities.

    Often, the faster that a supply chain operates, the more products and services
    that it can provide. However, the faster it operates, the more likely that accidents
    and major disruptions can occur.

    Concerns for safety are increasing as organizations outsource operations around
    the world, sometimes resulting in facilities and activities that are not as
    carefully designed and managed as those in the industrialized countries. This
    results in even more concerns about safety.

    Security concerns are increasing, as well. Unfortunately, various terrorist
    attacks have included bombs and shootings in and around organizations with products
    and services that have been perceived as somehow being destructive to society.
    Computer hackers are growing more sophisticated in their abilities to attack
    and adversely affect computers and their networking. This poses a substantial
    risk to the operations of organizations and their supply chains around the world.
    Safety
    and Supply Chain Management Go Hand in Hand
    Focusing
    on Supply-Chain Management – Better Safety, Monitoring and Quality
    Supply
    Chain Risk Management

    Managing Ethically
    and Social Responsibility in Your SCM

    The social responsibility movement arose particularly during the 1960s with
    increased public consciousness about the role of business in helping to cultivate
    and maintain highly ethical practices in society and particularly in the natural
    environment.

    Increasingly, organizations are being held publicly responsible for how their
    products and services are developed and provided. The public expects safe and
    secure working conditions. It expects workers to get livable wages. It expects
    products and services to be environmentally friendly.

    Major public relations problems have occurred with organizations found to be
    collecting and selling customers’ private data without getting the customers’
    permission to do so.

    Consequently, the topics of social responsibility and business ethics are increasingly
    mentioned in publications and conversations about supply chain management.

    5
    Steps to a More Ethical Supply Chain

    The Ethical
    Supply Chain
    Corporate
    Social Responsibility in Supply Chains
    Six
    Steps to a More Ethical and Sustainable Supply Chain

    Also see
    Social
    Responsibility

    Evaluating Your SCM Performance

    Back in the Preparation
    paragraphs, you were encouraged to prepare for developing your SCM system by
    establishing goals for its performance. Goals could include desired results
    at the organizational level for SCM and for the SCM system itself.

    Evaluations of the SCM should include assessing the extent of achievement of
    the SCM’s goals, as well as the quality of its ongoing operations to achieve
    those goals.

    Evaluations of the SCM system should be done at regular intervals, not just
    at the end of the year. The more complex the products and services and also
    the falser that the supply chain operates, the more frequently that the evaluations
    should occur.

    Here are several useful articles with metrics and guidelines to regularly evaluate
    the performance of your SCM system.

    How to Evaluate SCM

    Evaluating
    Your Supply Chain Management Process
    Evaluation
    of Supply Chain Management
    ROI:
    How to Evaluate Your Supply Chain Performance

    Metrics to Monitor During Evaluations

    10 Supply
    Chain Metrics & KPIs You Need For A Successful Business
    12
    Key Metrics for Supply Chain Management
    All
    17 Key Metrics For Supply Chain Management That You Ever Need

    Also see
    Evaluations
    How
    to Design Successful Evaluation and Assessment Plans


    General Resources

    Additional Overviews

    3
    Step Beginner Guide to Supply Chain Planning (excellent for beginners)
    The
    Ultimate Guide to Supply Chain Management
    Supply Chain
    Management
    What
    is Supply Chain Management? Definition, Example & Objectives!
    Logistics
    and Supply Chain Management – Comprehensive Guide
    Ultimate
    Guide to Supply Chain Management
    Supply
    Chain Management Tutorial
    Supply
    Chain Management – Complete Resource Guide

    Certifications

    Top
    8 SCM Certifications
    The
    5 Best Supply Chain Management Certifications

    Glossaries

    Supply
    Chain Definitions and Glossary (download it)
    Supply
    Chain Glossary of Terms

    Organizations

    Association for Supply Chain Management
    Council of Supply Chain Management Professionals
    Chartered
    Institute of Procurement & Supply
    Supply
    Chain Council


    For the Category of Operations Management:

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