Supply Chain And How To Manage It Effectively
Supply Chain is an activity used for effective strategic orientation that directly affects the production and business activities of enterprises. This form helps businesses to gain advantages over competitors.
What is Supply Chain?
Supply Chain is a system of organizations, activities, people, resources, and information involved in the movement of products or services from manufacturers or suppliers to consumers in the market.
In essence, Supply Chain is a dynamic but complex network that provides demand for customers.
The role of Supply Chain in the business
Surely you can also realize that Supply Chain has a certain important role for businesses. Because it directly affects the production and business activities of the company. Specific roles:
- Present in all production activities from planning, sourcing, manufacturing finished products, logistics management to coordinating with suppliers, partners, intermediaries,… Supply Chain Management will bring revenue to the business and the opportunity to surpass competitors.
- Supply Chain Management helps to ensure the efficiency of output as well as the input of products. At the input, the number of products of the enterprise will accurately forecast the needs of the market and users, reduce the level of risk and the amount of inventory. At the output, it fully supplies products to the market and brings profit and revenue to businesses.
- Good Supply Chain management will bring great efficiency in logistics activities. Ensure product delivery speed from manufacturer to customer and product freshness.
Supply Chain Model
When learning about the term Supply Chain, you will certainly not be able to ignore the most popular and most used SCOR model (supply chain reference model) today. Here are the 5 building blocks of the SCOR model.
As the process involved in planning for supply and demand, planning standards must be established to measure and improve the supply chain. Rules in the plan can span compliance, shipping, inventory, and assets.
Enterprises can determine network inventory management, performance, and supplier agreements by examining purchased materials or infrastructure supplies.
This phase will help businesses plan when to perform actions to receive, verify and transact goods in the supply chain.
This is an especially important step for the distribution and manufacturing industries to be able to meet actual or planned needs and answer make-to-order questions. design available upon receipt of an order), make to stock (production based on a combination of user demand and inventory), or engineer to order (production of finished products upon receipt of an order)
The processes involved in getting goods out, including distribution, shipping and order management, warehousing are all part of the delivery step. This step is concerned with finished product inventory, customer service, assets, product lifecycle management, and finished product import and export requirements.
This step will focus on goods, products that are returned for any number of reasons. Businesses must be equipped with the necessary skills to handle returns of defective products, packaging, or containers. Refunds will be based on specific business rules and other regulatory requirements.
Compare the difference between Supply Chain and Logistics
Anyone who learns about it will encounter the concept of Logistics because of its similarity. However, in reality, there are many differences between these two concepts.
- Supply Chain is a network of links between businesses, companies, or organizations working together while Logistics is just a small activity within the scope of a certain business.
- Logistics only covers activities such as distribution, purchasing, or inventory management while it covers broader activities and activities of Logistics.
- The scope of the Supply Chain is both inside and outside the business, while Logistics only operates within the business.
In general, it can be seen that Logistics is a small part of it. These two activities will complement and support each other so that the work is guaranteed with high performance.
Importance of supply chain management
This is an integrated function with responsibility for connecting key business functions and business processes in an enterprise into a cohesive business model that delivers certain efficiencies such as:
- Ensure the production process is operated continuously and smoothly.
- Create conditions to stimulate creative activities, improve technical skills, apply new techniques and explore other sources of production capacity.
- Improve the quality and reduce the cost of the product.
- Helping the business and production process of the enterprise to operate efficiently.
Using Blockchain technology in Supply Chain management
If you have trouble managing you’re, you can use Blockchain technology to drive better outcomes for your business.
Businesses must recognize that using Supply Chain will help them gain more information to develop production efficiency. But they have a headache in integrating information and taking advantage of the value that information brings to the shipment.
That is why their interest in Blockchain technology is increasing. Large enterprises have been capturing the potential of recording and transferring ownership when moving products between businesses and throughout them.
Benefits of Blockchain in Supply Chain Management
With Blockchain technology, each product movement will be divided into a block and transactions will be recorded when the products are handed over to other objects. This has brought businesses several benefits such as:
- The ability to track and control activities throughout the production, distribution, and transportation of goods. From there, businesses will eliminate risks in the process of moving products.
- Within each block, the blockchain will help you determine the price, quality, location, or other product management information of the parties involved.
- Blockchain technology ensures safety, transparency, and accuracy for prudent customers and promotes standardization, fraud reduction, and product consistency.
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