What Is Supply Change Management?

Supply change management (SCM) focuses on the entire process of delivering a product to the user. This includes the cumulative effort of several companies to supply the necessary tools and supplies to produce a product. Supply chain management also takes into consideration how companies are able to improve the process within their own organizations to deliver the final product to their customer. Effectively implemented, chemical processing companies are able to manage prices, margins and risks.

However, businesses must take an active management role on how to optimize the customer's perceived value of the product and sustain a competitive advantage in the industry. This is a conscious effort that must be established by organizations to run supply chains that are efficient and effective in the most the streamed way possible. The activities involved in transferring chemicals to plants include product development, sourcing, manufacturing and logistics as well as creating a system to manage these activities. Chemical companies must take into consideration how to forecast the supply chain models, create a distribution network, production planning and shipment consolidation.

Creating an effective supply chain management strategy connects companies through each process of moving a product to final production. These include how to move and store material to produce the product. In addition, communication is also necessary to allow numerous partners within the supply chain to create long-lasting and streamlined plans to control the day-to-day flow of chemicals and materials through the supply chain process.

Effectively managed, the result will be the ability for several companies to transform raw materials into a final product that is delivered to customers. The management process is created in five stages to guarantee that the entire process is effective. The process includes the planning stages, development, manufacturing the product, logistics and customer returns.

Throughout the planning stage, strategies are established to address how to fulfill customer requirements throughout the process. The main portion of the planning will focus on organizing a profitable supply chain. The development stage includes building a solid partnership with the suppliers of the raw materials to produce the goods for the consumer. This portion of the supply chain also takes into consideration the developing efficient shipping, delivering and repayment processes.

Once the product has been manufactured, the next step is to test, package and deliver the product. The logistics portion of the supply change management takes into consideration how to organize the delivery of the merchandise to the customer. The final stage takes into consideration how to minimize the risk of returns. In addition, the company must also create a plan on how to answer any customer questions on their products.

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Defining Supply Chain Management

Companies that deal with inventory will have to have some sort of system in place to effectively manage the supply chain that exists for any type of sales. A system of inventory needs to be as smooth running as possible so that a company is able to fulfill all its orders in a timely manner. If there is a shortage of inventory, sales fulfillment will fall behind and the company is in danger of losing both its reputation and credibility. More and more companies are using some type of supply chain management to keep track of what inventory they have, what is allotted for current sales invoices, what product has been ordered from the supplier, and what inventory is already on route from the supplier. Once this supply chain is running smoothly and efficiently there is little chance of lost sales or dissatisfied customers due to a problem with supply and demand.

Many companies have some employees that are trained in supply chain management to ensure that someone with a working knowledge of the supply and demand process is in charge. This type of management ensures that someone is capable of making those decisions in an informed and proactive manner. Many times the person in charge of the supply and demand chain will also be responsible for the rest of the employees working in the inventory, shipping, and production area of the company. When someone with the training that is provided by supply chain management is in charge the inventory and production side of a company runs with efficiency and order. The entire company is counting on this efficiency to ensure profits, repeated sales, and future growth.

Supply chain management is becoming more and more popular among many companies as they realize the importance of controlling and managing the product that enters and leaves the company. The more attention that is paid to supply and demand the more success a company will achieve.

Courses in Supply Chain Management and Logistics

One realises the importance of logistics only after knowing what it means to your business when delayed deliveries of raw materials result in frequent downtime and the consequent loss of production. It is the same case when your customers start complaining that their ordered goods do not reach them as promised.

Regardless of whether you are a buyer or a seller, your interest is in delivery of your order and not in the promises made to you. A seller is worth as much as his/her uninterrupted procedures and delivering as promised.

If you have to deliver quality service, you need to know the industry norms, which is easy if you undergo a professional logistics course. While there are many courses in supply chain management and logistics available online as well as regular MBA in logistics, it is imperative that you do the right course from a reputable business school.

If you aspire for a career as a logistics manager in a manufacturing organization or a third party logistics provider, you may try a postgraduate college that offers regular MBA (Logistics). If you have a job or own a business that involves a fair amount of shipping, you may opt for a general course such as a weekend MBA logistics course.

There are immense opportunities in the field of supply chain management. Logistics is a fast growing industry. Practically every business needs to manage logistics, for which purpose it either hires a logistics manager or outsource it to a service provider. If you do a postgraduate logistics course, you can expect to get job in any of the manufacturing or retailing companies or with a service provider. If you have the entrepreneurial spirit in you, you may even pursue a career in operational management or become a logistics service provider yourself.

The fact is that efficient logistics add value to an organization. If you have any doubts, then you may want to know why logistics is rated so high. Efficient logistics and supply chain management is instrumental in lowering transportation costs, increasing cash flows and reducing inventory cost. Logistics is the ability of an organization to deliver the right quantity of the right thing at the right place in the right condition and at the right price.

Production logistics is a logistic process that ensures that each machine or workstation is provided with the right item at the right time and in the right quantity. Logistics management, on the other hand, is a component of supply chain management, which is management of a network of interconnected businesses participating in the process of providing a product or service required by the end user.

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Proper Supply Chain Management Vital to Success in the Global Market

Operating in a global market and a networked economy requires a supply chain management element many companies aren't prepared or set up for in-house. Shipping services play a vital role in getting a product from its place of origin to its final destination, but are just one link in the detailed chain that is proper logistics management. If you're company has an operation that relies on international shipping including air freight or ocean freight to do business, Zircon Logistics reminds you of the importance of proper supply chain management in discovering solutions on the way from point A to point B.

Supply Chain Management is a term that refers to the planning, implementation, and controlling of all the operations of the supply chain. In short, it encompasses all movement and storage of raw materials, inventory, and finished goods from point-of-origin to point-of-consumption in an import-export world. A look at the multitude of objectives in the supply chain a company like Zircon Logistics addresses shows how complex it can be to get products from the factory to retail outlets around the world.

Cargo routing, accurate cost relations, cost reduction strategies, and increasing supply chain efficiencies are just the tip of the iceberg. Add in warehouse location selection, information systems integration, and establishing a supply chain forum for business partners and you've got what amounts to a full-time job on top of your full-time job. With so many variables in the mix, it's easy to see why companies unfamiliar with the ins and outs of the supply chain would outsource such a critical job to companies that can perform these tasks more efficiently and cost effectively.

The journey from point factory to retail outlet is one filled with potential potholes. Done right however, the journey can truly qualify as smooth sailing. Whether working within one company or across companies in a network, supply chain management can go a long way in engendering the type of results you need. In a business setting where success or failure depends on safe and prompt delivery, your peace of mind and profitability should be left in proven hands.

Supply Chain Management and Your Business

If you don't have the supplies, you can't meet the demand. And if you can't meet the demand, you could soon be out of business. If you're working with Enterprise Resource Planning (ERP), software, you can be assured that you will have a much better grip on your supply chain management. If you're a distribution company and you need to stay on top of supply chain materials, this software system can help you to efficiently do that. The supply chain can consist of inventory, purchasing and procurement, distribution, warehousing, logistics, planning and scheduling, project management, and more. It takes a strong piece of software to handle all of those chores.

Enterprise software provides you with a platform that is flexible, integrated and automated for quickly processing business tasks. The platform of application modules are placed for conducting business and these applications can all interact with one another. That is part of the beauty of this software system, applications that can communicate with one another, in real time. That equates to getting the product out of the door, on the trucks and delivered on schedule. It also means having the ability to keep your customers advised, every step of the way.

At some point everybody in the business comes in touch with the supply chain. That's why it's smart to have good supply chain management software to work with. It makes your job easier.

When in-house staff needs supplies, they won't need to call the warehouse to see what's in stock and to find out when they can get a delivery. That information is available to the accounting unit, sales and marketing, and management. They need only to access the system to see what's there and order it on the spot in real time. Now, that's taking care of business.

This software helps staff to work smarter, and to do so in less time. It includes tools for assessing and analyzing the business, it provides reports so that that management can see where they stand; and it includes business intelligence too, to help managers make smarter decisions. Any designated staff member can use this software system to conduct their business without having to call various other units, because all information is there for all to access when they need to.

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Pharmaceutical Supply Chain Management: Low Inventory and Good Customer Service

A Pharmaceutical Supply Chain is how prescription medicines are delivered to patients. They are large and consist of a number of products that are manufactured in several plants with different capabilities across the globe. The products are manufactured, shipped, and sold in different countries, each with their own unique customer, regulatory, and quality requirements.

The Pharmaceutical Supply Chain is responsible in ensuring that the right drug, reaches the right people at the right time and in the right condition. Customer service is very important as it directly impacts a patient's health and safety. Many Pharmaceutical industries try to provide a huge inventory to ensure close to 100 percent fill rate. However, it is difficult to have full product availability at a reasonable cost unless the supply chain processes are streamlined towards customer needs and demands.

The nature of pharmaceutical companies as well as the complexity of their supply chains make it challenging to gain visibility into the overall sequence of activities and inventory pictures. Continuous product availability and high customer service levels are mandatory in the industry, as patients and regulatory agencies have little tolerance for product shortages or deviations in the quality of products.

Problems with Inventory control include: excessive inventory, poor product forecasts, insufficient or excessive capacities, short dated drugs, unavailable products or long backlogs, to high costs for corrections. The problem pharmacies face is the dilemma over what to stock and how much to stock of each medication. Especially in the case of special order items for uncommon drugs pharmacies that get these products in for patients often don't use the entire bottle and are left with expensive excess inventory.

Improvements such as speed, flexibility, visibility, technology integration, responsiveness, costs and safety are essential to achieve product availability at optimal costs. To ensure the continuous improvements in supply chain processes, the pharmaceutical company needs to put in place clear performance measures. What gets measured gets noticed and improved.

Getting approval for process changes can be a difficult task. It's important not only to establish measurements but to get maximum buy-in from other internal clients whose approval you'll need. It's probably best to talk to these individuals before you submit a final plan to get a reading on whether they're inclined to support you or not.

The Pharmaceutical Supply Chain has a tremendous opportunity to lower costs, as well as improve asset management and enhance customer service by implementing best practices. They will gain a competitive advantage.

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Reverse Logistics in Supply Chain Management

The evolution of reverse logistics for manufactured products is developing in direct proportion to the rapid advancements in technology and the subsequent price erosion of products as new and improved products enter the supply chain at a faster pace. With such thin margins and so much competition, mismanagement of the supply chain can be devastating. Those organizations with the infrastructure to capture and compare the composite value of components with real time intelligent analysis and disposition based on changes in refurbishment cost, resale value, spare parts, repair and overall demand will not only become more profitable, but such flexibility and scalability will allow them to outmaneuver and eliminate the competition.

This is a case of modern Darwinism. It is survival of the fittest. It requires collaboration an integration within Supply Chain Logistics, or appear on the endangered species list. Even the mighty predator, the Tyrannosaurus Rex, was doomed to extinction by the constant progress of evolution. Today, technology drives evolution at an astounding pace. The ability to capture, migrate, integrate and facilitate the intelligent analysis of data is akin to the invention of fire. This is what will separate the companies who can walk upright from the ones that will be stuck in the tar pits of slow response.

The early days of Reverse Logistics were measured by convenience and customer accommodations. The focus was on the front end of the return process, the ability for consumers to be able to return unwanted or defective merchandise. The ability to facilitate a consumer return was a courtesy that turned into a compelling competitive differentiator in retail. The companies that did not support consumer returns found themselves at a strategic disadvantage to those that did, and were eventually forced to adopt the same consumer conveniences or lose those customers to the competition.

It did not take long for retail merchants to seek the same concessions from manufacturers and distribution channels. Stock rotation became a normal condition of business, and processes for returning defective merchandise became standard practice. Although this is accepted as commonplace today, it has not always been this way. Even today there are cultural differences with regards to consumer returns, especially for product that is not defective and returned because of 'customer remorse'.

As the cost of Reverse Logistics continued to increase, and as the methods of transportation became more sophisticated, manufacturers and distributors began to look for alternatives in transportation for savings. Planning and consolidating freight for return products was identified as a way to reduce expenses related to fuel and labor. This also led to detailed analysis of transportation options, like truck, air and railway. In Supply Chain Logistics business you are either the one driving the truck, the one pumping the gas, or the one paying the other two.

The next step in the evolution of Reverse Logistics was the experimentation and cost comparison between multiple local hubs and single consolidated returns centers. The simple analysis for savings contrasted the costs of warehouse space and manpower to the amount of freight and transportation fees for handling the back end of the Supply Chain. Other factors also played a significant role in the financial analysis, including volume, material costs and inventory controls.

As the costs of Reverse Logistics continued to rise, the importance of returning refurbished merchandise to market also became more significant. Organizations began to place financial significance on the devaluation of product for every day lost in transportation, handling, processing or warehousing. As technology and features improved, price and demand for aging product diminished, as did the ability to recoup costs from returns. Speed to return to market could be measured in resale value.

In the next step of Reverse Logistics evolution, there was an awakening and realization that reverse logistics is only a portion of the entire back-end services solution. Consolidation meant more than merely consolidating returns, it meant consolidation of activities related to back-end support operations. Manufacturers began to consolidate spare parts and materials in the same warehouse as the returned merchandise, discovering that it is less expensive to move parts and packing materials across an aisle than across state lines. Spare parts used to refurbish returns were placed in the same building. Taking this concept one step further, manufacturers began to consolidate depot warranty repair operations inside the same facility to maximize the utilization of parts, labor, warehouse and materials. This activity often required collaboration between previously diverse management and operational groups within large organizations. The collaborative effort reduced expenses for all participating departments and groups within the organizations.

The next major step in the evolution of Reverse Logistics is collaboration with partners and external resources. It is a greater awakening and realization of integration with the entire Supply Chain by leveraging data exchange. It begins with an understanding of the value of the components that comprise a completed manufactured product, the Bill of Materials (BOM). The Bill of Materials is also used by manufacturers to forecast, procure and manage an inventory of spare parts that are used for repair. Frequently, the combined cost of the individual components exceeds the cost of the original retail product. Furthermore, due to price erosion, the cost to repair some products exceeds the cost of replacing the entire unit. Manufacturers must make quick financial decisions regarding the return on investment to refurbish returned products, repair or replace defective warranty products, and the potential resale value for refurbished products returned to market. Manufacturers must also weigh the potential cost if inventory for procuring spare parts to support warranty, extended warranty and out of warranty regulations. To be truly effective, manufacturers must make these decisions before the returned product enters the reverse logistics supply chain, not after it is in it.

Manufacturers have the ability to gather data on activities that drive demand. Contributors to demand planning include failure rate or rate of repairs that require spare parts. At the very front end, potential return trends and potential repair trends can be identified by customer technical support or customer care phone calls. Quality analysis of returns and defective products can also be used to identify demands for spare parts planning. Resale value trends for refurbished products and seasonal sales cycles can be used to predict demand and resale value for refurbished products, and if the product is cost effective to refurbish or repair. In some cases the parts can actually be sold for more greater margin than the whole product. At the very least, parts can be harvested from return products to mix and match repair of other defective return products, avoiding expensive spare parts procurement when applicable. All of these factors contribute to planning the demand for a refurbished product or the component parts.

Once you know the demand and resale value for component parts and whole units, then it is only a matter of maintaining an intelligent planning engine that uses the input to analyze the Bill of Materials for returned products. Before the merchandise enters the Reverse Logistics Supply Chain, make an immediate and intelligent decision regarding the value and intended disposition of the whole unit or the component parts. In some cases the product will be scheduled for de-configuration to feed refurbishing activities or develop a spare parts inventory for warranty repairs. In other cases, the units may be expedited for refurbishing and resale. Some products may be scheduled to be environmentally scrapped for materials. Product may even be de-configured at the retail location to support local customer demands and thereby avoid freight entirely. Whatever the final result may be, the decision can be made before the product enters the Reverse Logistics Supply Chain cycle, as long as the intelligent engine is provided with continuously updated and accurate information. The new problem and the new solution is knowing what you sold, who wants to return it and what it is really worth, before you own it again.

It's hard to believe that there are still companies that invest millions of dollars each year in tools to forecast procurement and inventory management of spare parts, without accurately forecasting and managing the largest single source of surplus components that results from return merchandise. There are still organizations that struggle to achieve freight savings purely by negotiation or consolidation, without a achieving a balanced approach to freight avoidance, localization and intelligent de-configuration disposition. In the competitive landscape of rapidly evolving technology, mass production and eroding profit margins, managing the total cost of the supply chain and the composite value of the components is essential to cost reduction and financial survival. To ignore this aspect of reverse logistics can not only be costly, it can be fatal for an organization.

For Consumer Electronics and Computer products, the Reverse Logistics handling requirements are further complicated by compliance and regulations like RoHS, WEEE, controls on Lead based and Mercury materials, just to name a few. Recognizing these component parts is absolutely essential to the proper management of the intelligent engine that directs the disposition of returns immediately upon notification that merchandise may enter the returns cycle. Proper management is not only financially rewarding, but in the case of hazardous materials, it is the law.

In service, to be competitive is to be the first to provide the services that would otherwise put you out of business. If you can do this, you will place your competitors out of business, or at least have them working for you. Gathering the data that pertains to customer call centers, extended warranty services, spare parts, resale value, parts procurement costs and impending returns often requires extensive collaboration, integration and data exchange. To be successful, it is often necessary to partner with multiple organizations and experts to leverage best practices in a collaborative environment. The companies that collaborate, integrate and optimize date exchange will enjoy the competitive advantages of improved profit margins and precision management. The organizations that do not participate will be remembered as fabulous fossils.

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Importance of Supply Chain Management in Modern Businesses

Supply Chain Management (SCM) as defined by Tom McGuffog is "Maximising added value and reducing total cost across the entire trading process through focusing on speed and certainty of response to the market." Due to globalization and ICT, SCM has become a tool for companies to compete effectively either at a local level or at a global scale. SCM has become a necessity especially for manufacturing industry when it comes to deliver products at a competitive cost and at a higher quality than their competitors.

Here are some of the reason SCM has become important to today's manufacturing industry:-

Competitive Edge through Core Competencies

Today's business climate has rapidly changed and has become more competitive as ever in nature. Businesses now not only need to operate at a lower cost to compete, it must also develop its own core competencies to distinguish itself from competitors and stand out in the market. In creating the competitive edge, companies need to divert its resources to focus on what they do best and outsource the process and task that is not important to the overall objective of the company. 

SCM has allowed company to rethink their entire operation and restructure it so that they can focus on its core competencies and outsource processes that are not within the core competencies of the company. Due to the current competitive market, it is the only way for a company to survive. The strategy on applying SCM will not only impact their market positioning but also strategic decision on choosing the right partners, resources and manpower. By focusing on core competencies also will allow the company to create niches and specialization of core areas. As stated in the Blue Ocean Strategy outlined by Chan Kim, in order to create a niche for competitive advantage, companies must look at the big picture of the whole process, and figuring out which process can be reduce, eliminate, raise and create.

As an example stated by Chan Kim, the Japanese automotive industries capitalise on its resources to build small and efficient cars. The Japanese automotive industries gain competitive edge by utilising their supply chain to maximise their core competencies and position itself in a niche market. The strategy works and now Toyota Motor Corporation, a Japanese company, is considered to be the number one auto car maker in the world beating Ford and General Motors of the United States.

Value Advantage

SCM has allowed business nowadays to not just have productivity advantage alone but also on value advantage. As Martin Christopher in his book, Logistics and Supply Chain Management: Strategies for Reducing Cost and Improving Service' states, 'Productivity advantage gives a lower cost profile and the value advantage gives the product or offering a differential 'plus' over competitive offerings.

' Through maximizing added value and also reduce the cost in the same time, more innovation can be added to the product and process. Mass manufacturing offers productivity advantage but through effective supply chain management, mass customization can be achieved. With mass customization, customers are given the value advantage through flexible manufacturing and customized adaptation. Product life cycles also can be improved through effective use of SCM. Value advantage also changes the norm of traditional offerings that is 'one-size-fits-all.' Through SCM, the more accepted offerings by the industry to the consumers would be a variety of products catered to different market segments and customers preferences.

As an example, the Toyota Production System practiced in Toyota, evaluates its supply chain and determines what is value added activities and what is not value added activities. Non added value activities are considered to be 'Muda' or waste and therefore must be eliminated. Such non added value activities are overproduction, waiting, unnecessary transport, over processing, excess inventory, unnecessary movement, defects and unused employee creativity. The steps taken to eliminate waste are through Kaizen, Kanban, Just-in-time and also push-pull production to meet actual customer's demands. The Toyota Production System revolutionise the Supply Chain Management towards becoming a leaner supply chain system that is more agile and flexible towards meeting the end users demands.

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All About Logistics and Supply Chain Management Training

One does not need an introduction to understand the importance of logistics and allied sectors. The completion of sales contact through various logistics services is more than enough to make its value recognized. For a buyer more than the promises made to him what matters is that the goods are transported at the right place on right time. The timely deliver and uninterrupted procedure is enough to describe the potential and worth of the seller.

For delivering such quality service it is very essential to know the industry norms and requirements by undergoing a professional logistics course. Though there are a lot many options available online in this particular field however, to do the right kind of course from a reputed college is obligatory. Among all, MBA in logistic management offers you the knowledge and skills required to understand the role and requirement of this company.

If you are keen to pursue a Career in Supply Chain Management or logistics for that matter then you can try your hands either in post graduate course in this field in specific area or can even do a general course for logistics. You may even try and join a transportation company and then look for executive courses for specific areas that interest you the most. Joining a Supply Chain Management Training is not that difficult but, what and where you join matters a lot.

If we take an in depth look at the career prospects in this very field, the number of opportunities is immense. In fact, one can write their own destiny being in this field. Starting from the basis of customer satisfaction to operating and managing the entire process, this field has a wide range of career prospects.

Given below are few basic roles that you may pursue after having your Supply Chain Management training:

• Manufacturing
• Retailing
• Logistics service suppliers
• Operational management

An effective logistics and supply chain service can bring in a company as well as to the concerned executives to great level of success. If you still want to know why logistics stands so high in the market then go through the following pointers.

• It increases the transportation cost.
• Raises the production competence.
• Growth of retailing sector along with the main stream services
• Product line reproduced
• Reducing economic parameters

An eligible course for Supply Chain Management Training or logistics makes it all the more easy and convenient for the concerned person to perform their responsibility proficiently. Thus, it is really essential to pursue a suitable courses may a post graduate or MBA in logistic management can do wonders to your career in this industry.

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Enhance Distribution With Supply Chain Management (SCM) Software

The distribution industry faces a unique set of challenges. Distribution is the crossroads where production, purchasing, inventory, and customer demand all meet. As such, this industry often consists of multi-faceted companies that can suffer from fragmented operation priorities. Communication between these different departments and their goals is crucial in efficient operations and maximized profitability. Supply chain management (SCM) software is meant to bring about such collaboration. By directing a company's resources and attention according to a unified structure, great gains in efficiency and reductions in cost and redundancy are realized.

Operational Enhancements

Supply chain management (SCM) software ultimately connects the inflow of goods with the outflow of products. This task is accomplished first by inventory, warehouse, and purchasing management. A robust software system will integrate these functions together for live updating of current warehouse stocks and incoming shipments to accurately determine needed purchases. An integrated system takes the guesswork out of ordering and automates order entry to prevent missed or redundant orders, all the while freeing up working time for other core tasks. The supply chain leading to the warehouse can be complicated, but with a strong data sorter and analyzer, materials can be effectively tracked.

Once within the warehouse, supply chain management improves the handling of those materials. The software suite can match a barcode system with upstream and downstream technologies by putting an iron-clad tracker on each and every inventory item. Once goods are entered into an integrated system, the corresponding information becomes enabled across every department. Sales representatives, warehouse foremen, and purchasing agents have live access to stock information.

Customer Relationship Management

Once warehouse information enters a supply chain management system, the information now becomes invaluable to the sales department. Accurate inventory numbers are vital for precision in order entry and the timely fulfillment of those orders. By building a reputation of near-perfect deliveries, a technological investment has created repeat business and a sales rapport with customers. Problems that do emerge during operations filter back into the information database to identify issues and single out solution options. Customer service will link back into the front end of the business, creating repeated value from the same system implementation.

The supply chain management (SCM) software scheme of integrating data systems and sharing information makes the task of financial planners and procurement agents infinitely more effective. Being able to see the whole picture, the entire supply chain and product demand, forecasting becomes much more accurate. Reliable forecasting will eventually improve all other distribution processes as resource shortfalls will happen rarely and orders will be filled at a higher success rate.

This cyclic improvement attribute of supply chain management is what makes the technology such a strong investment. For maximum potency, a solution that is easy to implement and merge with existing systems dramatically cuts down on implementation time and returns the investment much more quickly. Both the technical details and the end user interface must seamlessly blend together for maximum potency. For example, Microsoft users will find Microsoft Dynamics a powerful SCM suite since it integrates with and operates likes Microsoft Office. A transparent, powerful system is the technological solution that will drive profitability within distribution companies.

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Supply Chain Management NVQ Level 3 - What Are the Requirements?

Before starting your NVQ Level 3 in Supply Chain Management, it is important to assess which units you will be covering in order to prevent any shortfalls throughout the duration of the Vocational Qualification Training.

A Level 3 candidate will be experienced in a day to day purchasing role with considerable responsibilities for the activities relating to the supply chain. This will include data gathering and monitoring of performance. The candidate will have a good understanding of the legal and commercial aspects of awarding and managing contracts.

The Level 3 NVQ has a requirement that 9 units are completed. Each unit will have a number of sub sections (Elements) as well as specific Performance, Ranges of Activity and Knowledge / Understanding criteria which the candidate must demonstrate.

There are 3 mandatory units, which apply to all candidates, and cover core management skills.

There are 17 Optional Units covering the remainder of the SCM requirements.

Mandatory Units

The candidate is required to complete all three mandatory units:

T1 : Maintain operational relationships within the supply chain

T2 : Analyse information on the supply chain

T3 : Apply improvements to the supply chain

Optional Units (6 from this section)

T4 : Monitor the achievement of project tasks

T5 : Control supplies at storage locations and facilities

T6 : Complete export procedures and requirements

T7 : Complete import procedures and requirements

T8 : Administer contracts

T9 : Analyse information on the procurement of supplies in the supply chain

T10 : Verify the capability of suppliers to meet supply specifications

T11 : Analyse the performance of suppliers

T12 : Identify potential suppliers for the supply chain

T13 : Place orders with suppliers

T14 : Monitor and progress the delivery of orders

T15 : Monitor the flow of supplies in the supply chain

T16 : Obtain information on storage locations and facilities

T17 : Obtain information on distribution requirements

T18 : Monitor the distribution of supplies

T19 : Monitor the flow of returned supplies

T20 : Monitor the transportation of supplies

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Why Is Efficient Supply Chain Management Important in a Growing Company?

A supply chain is an efficient process that ensures a company has all the supplies or materials that it needs to produce products especially in a manufacturing company. A growing company needs to have an efficient supply chain management to ensure its success and there are many firms that specialize in these services. What makes this process very important especially for small to medium scale companies is that it is practical to use and very easy to apply in most types of industries. 

Here are more reasons why you should consider supply chain management services to boost your growing company:

1. Never miss a deadline - with an efficient supply chain management system, you will be able to manage deadlines easily. Every raw material, equipment and tools needed to create products are handled efficiently with this system and these results in uninterrupted production with products reaching customers at the provided time frame. You can even handle as many orders as you can when the demand for your products increase; a supply chain management system will be able to deal with any huge demands of production in any kind of industry.


2. Maintain great relationship with your suppliers - a management system will help managers and supervisors choose the ideal supplier of raw materials, equipment and all the needs of production. And as you constantly order materials, you will be able to improve your relationship with your suppliers in the long run.


3. Always have the best prices for your materials - good relationship with your suppliers opens doors for the best prices and offers for materials needed for production, prioritization of your orders, increased trust in your company and of course a lot of savings on your part. You may opt to deal directly with suppliers and this significantly reduces prices of your orders and the time for your orders to get processed.


4. Connect with all departments using the supply system - when you use an efficient supply chain management system you will be able to connect all the areas of your company that is related to and may affect supply and demand. With this, you can process orders easier and faster, increase your productivity and improve efficiency in the company.


5. Reduce cost of production - definitely a single supply chain management system is equivalent to three or more employees doing the same work. You can significantly reduce the cost of production with the money saved used in other aspects of your business like product research, marketing and in advertising. You do not need to hire more employees either since this system will run for as long as you continue to give orders.

A supply chain management system is flexible and may also be programmed to work with different kinds of companies and industries and will also work with any kind of product or services. This kind of system works for small to medium scale businesses or may be expanded to work with large companies locally or for international businesses.

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The Strategic Importance of Supply Chain Management (SCM)

The Strategic Importance of Supply Chain Management (SCM)

1. Introduction:

Logistics supply chain management is one the most contemporary and challenging concept in today's business world. Due to the increasing global demand of business; transportation, procurement, manufacturing, distribution activities also increased tremendously. Now a day, major companies focusing on SCM to reduce cost and constantly trying to develop new innovative strategy to meet consumer demand to achieve competitive advantage.

2. Definition of Supply Chain Management:

In short, the right product at the right place at the right time at the right measure and at the right quantity is call supply chain management. For example, in a supermarket, if the consumer found in product shelves, there is tag for the product but no product in shelves; what you think? Yes, that is because of poor management of SCM. More precisely, SCM is the management of inbound and outbound logistics process to integrate from procurement, suppliers, manufacturers, warehouse, distributors, transportation, and store in order to meet consumer demands.

3. Why Supply Chain Management is Important?

As global competitions are increasing customer have different choices & needs to satisfy demand. For example, if there are demand for umbrella in rainy season so if you asked supplier to deliver 20,000 umbrellas in summer and expect to receive at the beginning of rainy season; what do think, would probably happen?

The supplier response lately after two weeks, slowly starting procurement then starting production and supply the goods at the end of rainy season. In this case the buyer will face tremendous losses.

Let's just think how can, we change the scenario with an effective strategy: consider the order of umbrella was given at the end of spring to deliver at the end of summer. Supplier response precisely, starting from procurement to distribution utmost efficiently and transported through freight within one week before ending summer. The delivery on time and arrive at 30th days in summer. The buyer happy to receive item on time and that allows the buyer to distribute products through distribution channel and, with the right forecasted of demand, buyer captures the market at the right time and making money.

In past manufacturers were known as the drivers of the supply chain as they were scrambling to meet customer demands at rapid pace but now customer is called the driving shots in a long term competitive advantage. To meet the customer demand accordingly, companies are shifting to customer oriented strategy (a bright example would be 'Dell computer'). Hence, to achieve competitive advantage in the market, it's necessary to deliver the product at the peak time.

4. Key Drivers of Logistics Supply Chain Management:

From the analysis different journal article, textbook, web research we found the key drivers are differ in according to different perspective, such as Globalisation, Sustainability, Cost-awareness, Customers, Suppliers, Technology and Transportation.

4.1 Globalization:

The external forces (i.e. political, economical, socio-cultural, technological, legal and environmental), local competition, continuous policy and regulations changes, pressure from international brands and all affects to meet the consumer demand in market. Thus, companies are facing huge challenges to meet the requirements globally. Through the product barriers are eliminated, no products are now considering domestic products but due to globalization forces companies tend to change policy and strategy regularly. Besides, with the benefits from globalization now, foreign investor are encouraged to invest in several countries which forces local companies to improve quality of existing products which create huge challenges in procurement, manufacturing, transportation and distribution activities for the companies.

For instance, a company can develop a product in the US, manufacture in China and sell in worldwide, i.e. Apple. This makes a complex and challenging activities for company. Thus, in order to maintain global demand Apple makes strategic choice to build global manufacturing and engineering infrastructure in California, Ireland and Singapore to capture market in US, Europe and Asia. This global strategy from Apple allows the company to take advantages of capturing large market. This strategy, allows Apple to become number ONE innovative company in the world.

4.2 Sustainability:

Creating sustainable chain has a major concern for companies. Constant variable pressure from regulations, geographic in nature, social-economic impact, international policies and principles in general is complex for managing SCM.

For example, green environment (i.e. carbon emission); local government are always imposing regulations which affect on the manufacturer. For instance, production and manufacturing in developed countries like in Europe is huge challenge as because of strict rules and policies of environmental issues compare to underdevelop countries like in Asia. For example, in automobile industry producing vehicles is challenging because of environmental issues in different countries.

4.3 Cost-Awareness:

There are four major decision areas in cost awareness:

4.3.1 a) Location: Convenient feasible location with availability resources including all facilities is the primary step of towards of creating strategic network. But due to geographical distance and cost companies often couldn't able to cope up with customer expectation.

4.3.2 b) Production: Cost fluctuation from production level is a critical issue for strategic decision, such as what product to produce, which plant to allocate and what supplies to get for production.

4.3.3 c) Inventory: Inventory cost varies at different level starting from raw materials to finished goods. Cost is also associated in buffer stock, safety stock or even days of inventory in hands as well as price increases during the periods of inflation affects.

4.3.4 d) Transportation: 30 percent of logistics cost associate with transportation that makes the companies to think about distribution channels about air, ship and road. Air shipment is fast, reliable but expensive while sea shipment is chap but time consuming.

4.4 Customers:

Customers are the most unpredictable variables to determine demand. Frequent changes of demand, new expectation, changing approach of existing product, influential behaviour attitude towards products are all determine to develop a customer-product innovation strategy. For example, Apples starts it business on the bases of computers but after understanding demand of consumer, they launched iPhone, iPad, iPod as means of innovations strategy which satisfy customer but not merely makes the customer delight but introducing facilities like ITunes, music, software application gradually capture the market the whole market.

The example here provides a key learning tool 'how the company understand its customer to achieve competitive advantage' which makes us to think what strategy they are following. In Apple strategy most of the iPhone and iPad items (i.e. parts) are outsourcing. More precisely speaking, very few components are created by Apple, hardware is supplied by contract manufacturer and software is supplied by millions of software developer to build various applications for the devices which minimize the cost.

4.5 Suppliers:

Supplier's motivation is important for quality, cost and delivery expectations of producing product with value as they have greater influential aspect of supplying item. For example, Dell's direct strategy requires processing orders direct from customer. Dell's pull strategy to build computers o customer's specifications and deliver within time. To support this model, Dell asked suppliers to keep inventories within 15 minutes of the manufacturing locations. Virtually all products are made to order. Every two hours, the factory planning system sends out a computerized message to suppliers detailing what parts the plant needs. That means there is almost no inventory of parts or products in the factory and this happen only because of healthy relationship with suppliers.

4.6 Technology:

With the benefit of technology, customer are now becoming more technological oriented focusing on online trading, online shipping, online payment, online information, online virtual chatting, and so on. This technological process has a greater impact on customers and now a day customers are constantly willing to get more information, answers, about their choice, preferences. Dell's could be an ideal example, how technology impact on business and increase revenue. The success of Dell's direct sells strategy depends mostly on continuous development of technological aspect as the customer willing to become more connected, assist them to develop cost effective quality product strategy.

4.7 Transportation:

Transport system is the most important economic activity among the components of business logistics systems. Around one third to two thirds of the expenses of enterprises logistics costs are spent on transportation. Beside good transportation is challenging issue to deliver product at right time. Thus, to enable flow of goods from one destination to another and to ensure on time delivery; companies needs to understand the right strategy of supply chain. However, unorganized transportation system, labour force, policies, laws and regulations, uncategorized rooting system is a big hindrance for supply chain solution. If there is suitable transportation network, delivery of the product to the market not ensured supply chain activities will be at risk.

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