The supply chain is the system by which information, financial resources and products move from the supplier or manufacturer to the end consumer. There may or may not be intermediaries depending on the nature of goods or services involved. Such intermediaries include retailers and wholesalers. Proper management of this chain is needed for the business to realize maximum benefits. The process of getting the most out of it is known as supply chain optimization.
The complexity of a supply system depends on a number of factors. These include the nature of the business, the size of the market, the processes involved and the technologies on which it runs. Modern businesses have to consider a wide variety of both internal and external factors unlike in the past when internal systems were the main concern. Advancement in technology have increased the collaboration between the various players such as suppliers, manufacturers and consumers.
One has to use a various tools and process to achieve optimization. Some of them include tools that minimize operation costs (manufacturing, transport, storage and so on), inventory management tools and monitoring and evaluation processes to determine the progress being made. Regardless of what is done, the aim is to have products delivered to the end consumer by incurring the lowest costs possible while reaping as much profit as possible.
Mobile-based technology has been widely adopted by many of the players in supply chains. The technology has helped increase the efficiency in the processes. Some of the areas in which it has been most useful include the facilitation of field sales, provision of direct services and in marketing. The technology makes it possible to transmit important product information (content, origin and manufacturing methodology) to all the players.
An important principle in optimization is predetermination of demand. This has to be done as accurately as possible by considering historical demand and predicting future trends. The approach can be used for single items or for aggregated data such as groups of consumers, types of merchandise and so on. With the information obtained, the business can determine the stock levels to be maintained both for products with erratic demand as well as those with stable demand.
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.
The process of optimizing is often long and quite frustrating. You need to think globally and act locally with regard to how you plan on implementing your strategy. A single decision in one area (such as manufacturing) is likely to affect other areas as well (such as marketing, transportation and distribution). Once a change has been implemented, regular reviews should be undertaken to find out whether progress is taking place.
Optimizing a supply chain is associated with a number of benefits. The most important is the fact that operation costs are markedly reduced. Customer service improves due to better predictability by the suppliers and retailers. An improvement in collaboration among the entities reduces inventory which is the desired end result.
The complexity of a supply system depends on a number of factors. These include the nature of the business, the size of the market, the processes involved and the technologies on which it runs. Modern businesses have to consider a wide variety of both internal and external factors unlike in the past when internal systems were the main concern. Advancement in technology have increased the collaboration between the various players such as suppliers, manufacturers and consumers.
One has to use a various tools and process to achieve optimization. Some of them include tools that minimize operation costs (manufacturing, transport, storage and so on), inventory management tools and monitoring and evaluation processes to determine the progress being made. Regardless of what is done, the aim is to have products delivered to the end consumer by incurring the lowest costs possible while reaping as much profit as possible.
Mobile-based technology has been widely adopted by many of the players in supply chains. The technology has helped increase the efficiency in the processes. Some of the areas in which it has been most useful include the facilitation of field sales, provision of direct services and in marketing. The technology makes it possible to transmit important product information (content, origin and manufacturing methodology) to all the players.
An important principle in optimization is predetermination of demand. This has to be done as accurately as possible by considering historical demand and predicting future trends. The approach can be used for single items or for aggregated data such as groups of consumers, types of merchandise and so on. With the information obtained, the business can determine the stock levels to be maintained both for products with erratic demand as well as those with stable demand.
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.
The process of optimizing is often long and quite frustrating. You need to think globally and act locally with regard to how you plan on implementing your strategy. A single decision in one area (such as manufacturing) is likely to affect other areas as well (such as marketing, transportation and distribution). Once a change has been implemented, regular reviews should be undertaken to find out whether progress is taking place.
Optimizing a supply chain is associated with a number of benefits. The most important is the fact that operation costs are markedly reduced. Customer service improves due to better predictability by the suppliers and retailers. An improvement in collaboration among the entities reduces inventory which is the desired end result.
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