Serving the end-user customer is the primary driver of supply chain decisions
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Plan and manage all resources required to meet customer demand for a company’s product or service. When the supply chain is established, determine metrics to measure whether the supply chain is efficient, effective, delivers value to customers and meets company goals. SourcingChoose suppliers to provide the goods and services needed to create the product. Then, establish processes to monitor and manage supplier relationships. Key processes include: ordering, receiving, managing inventory and authorizing supplier payments. ManufacturingOrganize the activities required to accept raw materials, manufacture the product, test for quality, package for shipping and schedule for delivery. Delivery and LogisticsCoordinate customer orders, schedule deliveries, dispatch loads, invoice customers and receive payments. ReturningCreate a network or process to take back defective, excess or unwanted products. Why is supply chain management important? Effective supply chain management systems minimize cost, waste and time in the production cycle. The industry standard has become a just-in-time supply chain where retail sales automatically signal replenishment orders to manufacturers. Retail shelves can then be restocked almost as quickly as product is sold. One way to further improve on this process is to analyze the data from supply chain partners to see where further improvements can be made. By analyzing partner data, the CIO.com post identifies three scenarios where effective supply chain management increases value to the supply chain cycle:
Key features of effective supply chain management The supply chain is the most obvious “face” of the business for customers and consumers. The better and more effective a company’s supply chain management is, the better it protects its business reputation and long-term sustainability. IDC’s Simon Ellis in The Path to a Thinking Supply Chain¹ defines what is supply chain management by identifying the five “Cs” of the effective supply chain management of the future:
Many supply chains have begun this process, with participation in cloud-based commerce networks at an all-time high and major efforts underway to bolster analytics capabilities. Evolution of supply chain management While yesterday’s supply chains were focused on the availability, movement and cost of physical assets, today’s supply chains are about the management of data, services and products bundled into solutions. Modern supply chain management systems are about much more than just where and when. Supply chain management affects product and service quality, delivery, costs, customer experience and ultimately, profitability. As recently as 2017, a typical supply chain accessed 50 times more data than just five years earlier. However, less than a quarter of this data is being analyzed. That means the value of critical, time-sensitive data — such as information about weather, sudden labor shortages, political unrest and microbursts in demand — can be lost. Modern supply chains take advantage of massive amounts of data generated by the chain process and are curated by analytical experts and data scientists. Future supply chain leaders and the Enterprise Resource Planning (ERP) systems they manage will likely focus on optimizing the usefulness of this data — analyzing it in real time with minimal latency. Supply chain consulting With IBM Services, you can evolve your supply chain processes into intelligent workflows, to reach new levels of responsiveness and innovation. Challenge siloed processes to uncover efficiencies, enable your teams to execute and deliver, and use emerging technologies like AI and blockchain to unlock opportunities in every step of the value chain — from demand planning to order orchestration and fulfilment. Supply chain consulting servicesSupply chain management use cases Chemonics Chemonics and IBM co-created a first-of-its-kind platform called Automatic Requisition Tracking Management Information System (ARTMIS). The ARTMIS platform helps track shipments at every step of the supply chain. This has allowed Chemonics to manage orders up to 24 months out. BASF BASF wanted to make digitalization an integral part of its business to create additional value for customers, grow the business and improve efficiency. Working with IBM, the company’s Nutrition and Health division conducted a proof of concept (PoC) with IBM® Watson™ technology to explore how AI and machine learning can support smarter inventory decisions, helping to ensure that products arrive in the right place at the right time. Farmer Connect Learn how Farmer Connect and IBM Food Trust™ are connecting coffee growers and consumers with blockchain. Explore supply chain topicsSupply chain control tower A supply chain control tower should provide end-to-end visibility across the supply chain — particularly into unforeseen external events. Order management The tracking of orders from inception to fulfillment and managing the people, processes and data connected to the order as it moves through its lifecycle. Inventory management Clear visibility into inventory transactions can positively impact the entire process of ordering, storing and using inventory — from raw materials to finished product. Electronic data interchange EDI is a standard format to exchange business information between two organizations electronically instead of using paper documents. Supply chain analytics Analytics that can affect quality, delivery, the customer experience — and ultimately, profitability. Supply chain optimization Supply chain optimization makes the best use of technology and resources like blockchain, AI and IoT to improve efficiency and performance in a supply network. Blockchain supply chain Enhance trust across your supply chain network with the business and technical expertise of IBM Blockchain. B2B integration Business-to-business (B2B) integration is the automation of business processes and communication between two or more organizations. Managed file transfer Managed file transfer (MFT) is a technology platform that allows organizations to reliably exchange electronic data between systems and people in a secure way to meet compliance needs. Which of the following is a benefit of flows in a supply chain?Improved Product and Material Flow - Effective supply chain management allows companies to shorten their production lead times by improving the material and product flow throughout their operations. The less time it takes for finished goods to reach your customers, the more efficient your product flow is.
Which of the following is true about the supply chain adding value for customers and stakeholders?Which of the following is true about the supply chain adding value for customers and stakeholders? Adding value to a good or service is the responsibility of each entity and process in the supply chain.
Which of the following is a defining characteristic of supply chain management?characteristic of supply chain management. The correct answer is (a) because a key aspect of supply chain management is the sharing of key information from the point of sale to the consumer back to the manufacturer, the manufacturer's suppliers, and the supplier's suppliers.
What does the term flattening of the globe refer to?The shrinking of the world into one global economy
Supply chains and their management reflect the revolution in electronic communication and the shrinking of the world into one global community—what author Thomas Friedman calls the “flattening of the globe.”
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