Optimum management of the supply chain is one of the essential aspects that ensure a business’s efficiency. It determines all the processes involved in the creation, manufacturing and distribution of a business’s product. Take a look at the supply chain management process to better understand what it comprises.
The supply chain process comprises four broad components that help foster customer satisfaction through a series of steps determined as per the business’s industry and operations. These include demand management, supply management, sales and operations planning along with product portfolio management, and involve all the initiatives undertaken towards achieving these goals - from planning to implementation.
Proper management of the supply chain process cycle results in high business performance, cost-effectiveness throughout the supply chain and revenue conversion.
One of the essential supply chain management process steps, demand management, comprises three parts.
Demand planning primarily involves a forecast for reliable product delivery. A well-planned out demand management results in improved revenue forecast accuracy while also achieving improved product profitability.
Next, a critical component of the supply chain process, merchandise planning refers to the stepwise approach of merchandise buying, planning as well as selling for maximum ROI, while also ensuring prevalent merchandise availability across the market.
Trade promotion planning involves marketing techniques that result in the improvement of demand through stimulation of involved factors such as pricing, demonstrations, etc.
Ensuring a proper supply chain management process flow, the stage of supply management involves planning for supply, production, inventory, capacity and distribution. Production and supply planning comprise supply management, collaboration and production scheduling to ensure fulfilling requirements related to the demand process along with resource allocation for improved production capacity.
Inventory planning under supply chain management helps optimise the inventory quantity as well as timing for aligned needs of business production and sales. Capacity planning under this process involves determining the staff and equipment required for production, as per assessed demand.
At last, distribution and network planning involve controlling goods movement across the supply chain, including the supplier, manufacturer and the point of sale.
An integrated monthly system of managing business operations, S&OP refers to the process view of supply chain involving its key drivers, i.e., sales, production, inventory, demand, introduction of a new product, etc.
Sales and operations planning aim to improve critical decision-making processes, along with propagating integrated strategic ideas focused on a business’s financial impact. It has a critical contribution to improving the effectiveness of a business’s supply chain management process.
All in all, S&OP planning is targeted at adequately fulfilling the customers’ needs while making way for maximum profitability.
Product portfolio management is an integral part of the supply chain management process steps. It plays a crucial part in a company’s overall business strategy to achieve its business goals. It is a process of managing the company’s products and the corresponding supply chains, from ideation of a product to its introduction into the market. It also plays an important role in maintaining the competitive position of the company by driving sales and allocating resources for products to meet the market needs.
Ensuring adequate planning for all steps involved in the supply chain management process also requires sufficient funding with timely fulfilment. Bajaj Finserv thus brings adequate supply chain financing in the form of high-value business loans of up to Rs.45 lakh with quick approval to ensure a venture does not run out of funds when they are needed the most.
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