Most entrepreneurs and business leaders would have heard about Logistics and supply chain management. A business has to manage all of the systems within itself and has to deal with several factors within the productivity line in order to cope up with orders, withdrawal, refunds, relations, and other issues. The Logistics and supply chain management is generally a method in business that includes planning, controlling, data collecting, carrying and storing, other services, communication services and network which enhance product quality and promote improvements as well as further developments from the beginning of a productivity line to the end of a productivity line to ensure that customers at the end will receive the best of all. The management itself cares about feed backs in order to compute out the percentages of likes and dislikes so that products can be improved or produced to supply the demands and wants of the customers. The supply chain managements allow relationships within a business to flow smoothly. A relationship between a purchaser and a manufacturer is also one of the chains within the supply chain management. There are different kinds of supply chain management in logistics which vary from case to case due to different demands and situations. Its complexity in management could also vary from each other depending on the size of a business and the numbers of items manufactured.
Elements of the Supply Chain
Logistics and supply chain management has numbers of elements that are linked together to allow a smooth flow of productivity. The chain begins with a supplier always, and ends with a customer once the whole system is processed.
1. The customer or purchaser starts off by purchasing and deciding on items needed for sale offered by a company. Then, by contacting a sales department of any specific companies or suppliers, the amount of items needed, the date of delivery, and a specific receiving place should be written down or noted down once asked and ensured. If products are needed to be manufactured, the sales order will include additional fees and requirements that are needed to be fulfilled by the production facility.
2. The requirements by the customer’s ordered sales will be combined with other orders. The production facility would also have to make plans and discuss about several topics in relation to productivity to ensure customers high quality products and make sure not to jump out or move away from the deadline. Plans include records of what is needed to be bought; items that are needed to be manufactured, and raw materials.
3. The purchasing facility receives all the information and raw materials; what is left are for them to follow the orders made by the customers and know what is needed. The purchase facility then sends all information including orders to selected suppliers to deliver raw materials and other things that are needed to the manufacturing department for them to complete the production of products within a required time period.
4. Once raw materials are accepted and received by the suppliers, they will have to check for quality and accuracy; if approved, materials will move into a warehouse. The suppliers will then send an invoice to the company the amount of materials delivered; these materials will be kept in storage until they are called out by the production department.
5. When the time has come for products to be produced, raw materials will be called out to the production department to complete orders. The finishing products ordered by customers are manufactured by raw materials that were once purchased from suppliers. Once production is done, all products will be sent back to the inventory or storage and will later be delivered to the customers.
6. After finished products are moved into warehouses and kept in storage, the shipping facility will determine which method to use in order to ship all products efficiently and consider the costs of transportation to minimize as much expenses as possible plus, deliver all products on time. Once all finished products are delivered successfully, the company will send an invoice repeating the amount of products delivered, time, date, and what products are delivered.
A Healthy Operation
To make sure the supply chain management will work well it is important to have associated technology and tools. In order for a business’s productivity to improve, operate efficiently, and have the highest level of customer satisfaction, the supply chain management has three main activities where businesses and different parts of companies have to focus on: strategic, tactic, and operational activities.
1. Strategic activities- the company has to consider the size of the whole system, the location, partnerships with suppliers, products needed to be manufactured, and other factors that will affect the whole organization. At this level, managers will have to look closely at strategic decisions whether or not it covers the whole entire system.
2. Tactical activities- Tactical decisions include various techniques and ways to reduce costs and use up its benefits for the system. These decisions might include performing ethical practices, working with logistics companies for suggestions and tips, and get advices in order to reduce transportation costs and warehouse or storage costs.
3. Operational activities- Decisions are made daily within the system from the beginning of the productivity line to the end of the line of production. Operational practices include making plans, schedules, purchasing agreements with suppliers, taking orders from customers, and moving products into warehouses.
Technology and its Effects on Businesses
In order for a business to succeed and be able to compete with other businesses (especially international businesses) it is a must to have technological devices, tools, and a working or an operation system. Technology has now become our daily tools we use in life; without technology, businesses wouldn’t flow or run efficiently in our modern world today. Behind the scenes, every large businesses have technological systems and one of them is called the Enterprise Resource Planning. This expensively purchased software does so many things that will squeeze down the need for employees and reduce costs as a long-term effect. This software will monitor the whole supply chain system and keep records of all information which includes date of purchase, time of purchase, amount of orders, and other information set by the settings of the software to ensure safety and accuracy.