Supply Chain Management(SCM) deals with the planning and execution issues involved in managing a supply chain.
The components of SCM are:
- Demand Planning: (forecasting)
- Demand Collaboration: (collaborative resolution process to determine consensus forecasts)
- Order Promising: (When can one promise a product to a customer taking account lead times and constraints)
- Strategic Network Optimization: (what plants and DC’s should serve what markets for what products) (monthly – yearly)
- Production and Distribution Planning: (Coordinate the actual production and distribution plans for a whole enterprise) (daily)
- Production Scheduling: (For a single location create a feasible production schedule)(minute by minute)
- Plan of reduction of costs and management of the performance (diagnosis of the potential and the indicators, the organization and planifiaction strategic, masters dysfunctions in real-time, evaluation and accounting reporting, evaluation and reporting quality
Traditional Model
The traditional model of supply chain management follows a linear sequence of events. The order could be Marketing, design, process planning, purchasing, and vendors.
Integrated product-process design
Inter-functional integration
An inter-functional integration approach to supply chain management can be characterized by the following:
- Concurrent engineering: This involves a cross-functional team in the NPDP (new product development process]]. Parties from the marketing department, design department, and process planning would work together to design the product.
Inter-organizational integration
This is punctuated by:
- Early involvement of the purchasing department in the design
- Pre-sourcing of key vendors
- Design is driven by cost targets
- Cross-enterprise teams which would include suppliers, customers, distributors, legal teams, accountants, and others
- The design would be done with consideration for logistics constraints or needs
