The supply chain is a term that refers to the process by which products, information and financial resources are moved from the supplier to the end consumer. In many cases, there is a varying number of intermediaries such as manufactures, retailers and wholesalers. This system has to be managed in optimized fashion so as to maximize the returns to the business. Supply chain optimization is something that every business needs to take seriously.
A number of factors determine the complexity of a supply chain. These include, for instance, the type of business in question, the processes that have to be carried out for the product to reach the consumers, the size of the market (local or international) and the type of technology that is employed. The advancement in technology that has taken place in recent times has helped increase the interaction between the major players (manufactures, suppliers, retailers and consumers).
Various tools and process are used in making the chain system as efficient as possible. One of the areas t targeted is the operation costs (related to manufacturing, transportation and storage). These costs need to be maintained at the very minimum. Inventory management tools help in ensuring that consumers get products as and when they need them. Another important tool is monitoring and evaluation that helps to track progress.
The utilization of mobile-based technology can improve various aspects of the chain. Such will include field sales, marketing as well as provision of direct services to consumers. Through the mobile-based technology specific product information such as item origin, contents and manufacturing methodology can be obtained by prospective consumers. Since some consumers are quite sensitive about sustainability, information on the same can be easily communicated through the same platform.
One of the principles of optimization is to try and predetermine demand accurately. This is done by taking into account historical demand and predicting future events. It is possible to use this approach for aggregated data such as a specific group of customers or a type of merchandise. Safety stock levels have to be managed both for products that have steady demand as well as for those whose demand is erratic.
Before embarking on the exercise, you need to analyze your strengths as a company. Results are likely to reveal areas that you perform better than others. For the areas in which you may not be doing so well, consider outsourcing. There are many firms that are specialized in one or two tasks on the supply system hence are likely to have greater efficiency than a company that has to handle everything.
Bear in mind that the process of optimization is fairly long and frustrating. As you plan to make changes to the process strive to have a global mindset. This means that you should consider all the aspects of the chain even as you plan on making changes on one or a few areas. For instance, if you are going to make changes in manufacturing, other areas such as marketing, transportation and distribution will also be affected.
Optimization of a supply chain brings with it numerous benefits. One of them is that the operation costs are significantly reduced. Increased predictability of product demand by suppliers translates into better customer service. Increased collaboration among the players helps reduce the inventory faster than in cases where such cooperation is non-existent.
A number of factors determine the complexity of a supply chain. These include, for instance, the type of business in question, the processes that have to be carried out for the product to reach the consumers, the size of the market (local or international) and the type of technology that is employed. The advancement in technology that has taken place in recent times has helped increase the interaction between the major players (manufactures, suppliers, retailers and consumers).
Various tools and process are used in making the chain system as efficient as possible. One of the areas t targeted is the operation costs (related to manufacturing, transportation and storage). These costs need to be maintained at the very minimum. Inventory management tools help in ensuring that consumers get products as and when they need them. Another important tool is monitoring and evaluation that helps to track progress.
The utilization of mobile-based technology can improve various aspects of the chain. Such will include field sales, marketing as well as provision of direct services to consumers. Through the mobile-based technology specific product information such as item origin, contents and manufacturing methodology can be obtained by prospective consumers. Since some consumers are quite sensitive about sustainability, information on the same can be easily communicated through the same platform.
One of the principles of optimization is to try and predetermine demand accurately. This is done by taking into account historical demand and predicting future events. It is possible to use this approach for aggregated data such as a specific group of customers or a type of merchandise. Safety stock levels have to be managed both for products that have steady demand as well as for those whose demand is erratic.
Before embarking on the exercise, you need to analyze your strengths as a company. Results are likely to reveal areas that you perform better than others. For the areas in which you may not be doing so well, consider outsourcing. There are many firms that are specialized in one or two tasks on the supply system hence are likely to have greater efficiency than a company that has to handle everything.
Bear in mind that the process of optimization is fairly long and frustrating. As you plan to make changes to the process strive to have a global mindset. This means that you should consider all the aspects of the chain even as you plan on making changes on one or a few areas. For instance, if you are going to make changes in manufacturing, other areas such as marketing, transportation and distribution will also be affected.
Optimization of a supply chain brings with it numerous benefits. One of them is that the operation costs are significantly reduced. Increased predictability of product demand by suppliers translates into better customer service. Increased collaboration among the players helps reduce the inventory faster than in cases where such cooperation is non-existent.
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