The success of any business will be enhanced with a proper supply chain plan being established or in place. A good supply chain plan works to guarantee that products are distributed and delivered in the right manner. It minimizes costs through optimization, waste reduction, and enhancing the company’s ability to adapt in the event that there is a change in demand or other market factors.
A proper supply chain plan will also provide an opportunity for the company to develop a strategic partnership with suppliers and other partners. It reduces exposure to risks, enhances ability to withstand disturbances or disruptions, and fosters creativity as well as competitiveness. It also causes meets customer requirements and enhances visibility and control. The supply chain plan supports responsible sourcing practices.
All these factors can ultimately improve the overall performance and competitiveness of the business. Making a comprehensive supply chain plan is critical to any startup strategy.
What is a supply chain plan?
The supply chain incorporates all the stages of production, from the initial phase to the final stage that involves delivering the products or services to the customers who ordered them, and the customers can be supplied by the companies. A supply chain plan outlines all the activities that span the entire process of producing goods or services and delivering them, such as the sourcing of raw materials, all the way to the final buyer.
3 Major Parts Of the Supply Chain
Almost every business today is part of a supply chain. Factories supply, store, produce and sell raw materials to their dealers. Stores sell products purchased from intermediaries, wholesalers, or factories to retail customers. However, e-commerce companies use the supply chain most effectively. There are currently thousands of B2B2 and B2C based e-commerce companies at the global level. In running an e-commerce business, the procurement, administrative, and delivery process may be structured as follows:
a. Procurement:
Products can be procured from many places including direct manufacturers, suppliers and wholesalers. It is essential for businesses to develop close relationships with their suppliers and obtain reasonable rates that guarantee prompt delivery and low pricing. Automated procurement systems can streamline the procurement process and reduce the risk of stockouts or overstocking.
b. Warehouse:
Having an efficient and effective order fulfiller is the warehouse, and it helps all the processes in the e-commerce value chain such as receiving, storage, picking, packing, and more. An order should be dispatched in minimum time possible and at the most accredited accuracy or level. With the help of automated systems and technology such as barcode scanner, and inventory management software, potential efficiency and accuracy are assured.
c. Delivery:
To stay ahead of the competition in this day and age, businesses must develop a cost effective and reliable delivery process that satisfies clientele expectations. It is possible for businesses to offer solutions to satisfy client needs by choosing an optimal shipping carrier, delivery method such as standard shipping, express delivery, or even same day delivery. When such automated shipping integration systems are employed, business can eliminate shipping stress factors and such systems can be applied to reduce operational costs.
Most businesses who have optimized their delivery processes are at an added advantage in the sense that they have an effective supply chain and satisfaction levels for customers are also very high.
What Is the Supply Chain Planning Process?
The supply chain planning encompasses the intricate details of all activities concerned with delivering a good or service. It comprises of Activities such as demand management, supply management, production management, inventory management, distribution management, capacity management, performance evaluation and improvement among others. The process begins with goal setting and objective establishment, current activity assessment, demand forecast creation and supply chain design.
Another critical stage is the risk assessment where risk mitigation measures are crafted. In the end, the plan is executed and control over its execution is put in place, evaluations are conducted and corrective actions introduced seeking to enhance effectiveness and achieve the end business goal. The enterprise resource management focuses on resource availability within the organization and enables the management to operationalize resources, processes and technologies required. In this way, they satisfy customer needs and improve the overall performance of the business.
How to Build a Supply Chain Plan in 6 Steps
1. Define goals and objectives:
Start by clearly defining the goals and objectives of your supply chain plan. Consider factors such as customer satisfaction, cost reduction, risk management, and sustainability.
2. Analyze current operations:
Assess your current supply chain operations to identify strengths, weaknesses, opportunities, and threats. This will provide valuable information to help you develop a more effective supply chain plan.
3. Develop a demand forecast:
Use historical data, market trends, and other relevant information to forecast demand. This will help you understand future customer demand and plan your supply chain accordingly.
4. Map out your supply chain network:
Prepare maps showing suppliers, manufacturers, distributors and customers. Prepared visual maps will show the ways goods and material flows as well as weaknesses within the system.
5. Identify risk and mitigation strategies:
Suggest possible risk factors for the supply chain like, disruption in supply or suppliers, delays in shipments, changes in demand pattern, etc. There must also be integration of strategies that will act to reduce the effect of the risk.
6. Implement and monitor the plan:
After defining the plan, strategies should be executed and results observed in order to be certain the plan is effective. Improvements should also be made to the strategies developed in order to enhance the performance of the strategy in the long run.
Conclusion
Today, everything is metamorphosing so quickly, the globalization processes of technological progress, sensitive equilibrium on the market, ever increasing competition, etc. Both modern and traditional enterprises should prepare and permanently adjust the flexible supply chain design. In any case businesses should make the best predictions and appropriate strategic moves for the market.
In the last 10 years, technology has enabled companies to improve and even automate their forecasting and supply planning. Today it is rather computers that can perform these tasks by running simulations and analyzing the results.
Today it is more than ever before, supply chain management enjoys a weighting as a specialized field. Hence larger corporations find it more effective to outsource supply chain planning on to specialists. New solutions contribute to decreasing the S&OP but B1B forecast plans took the first place. To put it simply the supply chain plan is actually useful for quite a big percentage of businesses. Just about all business people including those engaged in e business quite need supply chain planning.
Written by: Aykut Alan
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