Core concepts of SCM?

SUPPLY CHAIN MANAGEMENT In commerce, supply chain management (SCM), the management of the flow of goods and services, involves the movement and storage of raw materials, of work-in-process inventory, and of finished goods from point of origin to point of consumption. Interconnected, interrelated or interlinked networks, channels and node businesses combine in the provision of products and services required by end customers in a supply chain. Supply-chain management has been defined as the "design, planning, execution, control, and monitoring of supply-chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally.” For more explanation visit: https://www.youtube.com/watch?v=Mi1QBxVjZAw LOGISTICS Logistics is generally the detailed organization and implementation of a complex operation. In a general business sense, logistics is the management of the flow of things between the point of origin and the point of consumption to meet the requirements of customers or corporations. The resources managed in logistics may include tangible goods such as materials, equipment, and supplies, as well as food and other consumable items. The logistics of physical items usually involves the integration of information flow, materials handling, production, packaging, inventory, transportation, warehousing, and often security. For more explanation visit: https://www.youtube.com/watch?v=Vu3o2-3uSKE CORE CONCEPTS OF SCM Shortly after your alarm clock goes off and the coffee maker kicks on, the aroma of your favorite coffee fills the air. The supply chain is responsible for getting those coffee beans across the world and to your kitchen. Something so common in every household, takes a great deal of planning, demand forecasting, procurement, and logistical expertise to move those beans to local sellers while still fresh. Without a strong supply chain in place, your caffeine-fix options would be severely limited. SCM involves a series of key activities and processes that must be completed in an efficient (fuel-conserving, cost-reducing, etc.) and timely manner. Otherwise, product will not be available when needed by consumers like you. The Seven Rights of Fulfillment The ability to meet customer requirements, for everything from coffee beans to Crocs, is built upon the expectation that everything is done correctly in the supply chain. And that means doing it right the first time – no mulligans, no mistakes are allowed. In the quest to provide quality service and satisfy customers, world-class companies along the supply chain are guided by the Seven Rights of Fulfillment. If you think about it, every order needs to be executed according to these seven goals. You must attempt to deliver a “perfect order” to every customer every time. Doing it right the first time makes the customer happy, saves the cost of fixing errors, and doesn't require extra use of assets. Thus, every part of the organization has a vested interest in pursuing perfection. A “perfect order” delivery is only attained when all Seven Rights of Fulfillment are achieved. To accomplish a perfect order fulfillment, the seller has to have your preferred product available for order, process your order correctly, ship the entire order via the means that you request, provide you with an advanced shipping notification and tracking number, deliver the complete order on time and without damage, and bill you correctly. A seller’s ultimate goal is to make the customer happy by doing the job right, which gives them a good reason to use the seller’s services again in the future. SCM Flows If the goal of SCM is to provide high product availability through efficient and timely fulfillment of customer demand, then how is the goal accomplished? Obviously, you need effective flows of products from the point of origin to the point of consumption. But there’s more to it. Consider the diagram of the fresh food supply chain. A two-way flow of information and data between the supply chain participants creates visibility of demand and fast detection of problems. Both are needed by supply chain managers to make good decisions regarding what to buy, make, and move. Other flows are also important. In their roles as suppliers, companies have a vested interest in financial flows; suppliers want to get paid for their products and services as soon as possible and with minimal hassle. Sometimes, it is also necessary to move products back through the supply chain for returns, repairs, recycling, or disposal. Because of all the processes that have to take place at different types of participating companies, each company needs supply chain managers to help improve their flows of product, information, and money. This opens the door of opportunity to you to to a wide variety of SCM career options for you! SCM Processes Supply chain activities aren't the responsibility of one person or one company. Multiple people need to be actively involved in a number of different processes to make it work. It's kind of like baseball. While all the participants are called baseball players, they don't do whatever they want. Each person has a role – pitcher, catcher, shortstop, etc. – and must perform well at their assigned duties – fielding, throwing, and/or hitting – for the team to be successful. Of course, these players need to work well together. A hit-and-run play will only be successful if the base runner gets the signal and takes off running, while the batter makes solid contact with the ball. The team also needs a manager to develop a game plan, put people in the right positions, and monitor success. Winning the SCM “game” requires supply chain professionals to play similar roles. Each supply chain player must understand his or her role, develop winning strategies, and collaborate with their supply chain teammates. By doing so, the SCM team can flawlessly execute the following processes: • Planning – the plan process seeks to create effective long- and short-range supply chain strategies. From the design of the supply chain network to the prediction of customer demand, supply chain leaders need to develop integrated supply chain strategies. Broadly, the typical sales and operations planning steps are: 1. Define Your Plan using demand planning and statistical forecasting generate a demand plan aligned with seasonality & product life cycle trends. 2. Agree on an Inventory Strategy to achieve desired service levels by defining statistical safety stocks and reorder point replenishment models. 3. Optimize Supply by rebalancing inventory across sites to resolve supply gaps. 4. Manage Your Constraints to ensure that there is enough capacity to fulfill demand increases and balance worker capacity with material levels 5. Make Decisions by evaluating financial trade-offs to maximize revenue and optimize inventory • Procurement – the buy process focuses on the purchase of required raw materials, components, and goods. As a consumer, you're pretty familiar with buying stuff! Procurement is just one of the many roles involved in a good supply chain. It should be considered a core component of a company’s corporate strategy. Proper procurement management is vital because an organization can end up spending over half of its revenue on purchasing goods and services. Procurement makes a huge difference between the success and failure of a business. The procurement process includes the following steps: 1. Identifying requirements 2. Approving the request for purchase 3. Finding suppliers 4. Making inquiries and receiving quotations 5. Negotiating the terms 6. Making a final selection of the vendor 7. Creating a purchase order and goods receipt 8. Shipping management 9. Receiving invoices and making payments • Production – the make process involves the manufacture, conversion, or assembly of materials into finished goods or parts for other products. Supply chain managers provide production support and ensure that key materials are available when needed. Production has following planning steps: 1. Sales Forecasting 2. Sales and Operations 3. Demand Management 4. Detailed Scheduling 5. Production: 6. Material Requirements Planning 7. Distribution – the move process manages the logistical flow of goods across the supply chain. Transportation companies, third party logistics firms, and others ensure that goods are flowing quickly and safely toward the point of demand. It is an overarching term that refers to numerous activities and processes such as packaging, inventory, warehousing, supply chain, and logistics. 8. Customer Interface – the demand process revolves around all the issues that are related to planning customer interactions, satisfying their needs, and fulfilling orders perfectly.

Demand Management?

Demand management is a planning methodology used to forecast, plan for and manage the demand for products and services. This can be at macro-levels as in economics and at micro-levels within individual organizations. For example, at macro-levels, a government may influence interest rates in order to regulate financial demand. At the micro-level, a cellular service provider may provide free night and weekend use in order to reduce demand during peak hours.

Supplier Relationship Management?

Supplier relationship management (SRM) is the discipline of strategic planning for, and managing, all interactions with third party organizations that supply goods and/or services to an organization in order to maximize the value of those interactions. In practice, SRM entails creating closer, more collaborative relationships with key suppliers in order to uncover and realize new value and reduce risk of failure. Supply chain management (SCM), the management of the flow of goods and services, involves the movement and storage of raw materials, work-in-process inventory, and of finished goods from point of origin to point of consumption. Interconnected, interrelated or interlinked networks, channels and node businesses combine in the provision of products and services required by end customers in a supply the chain.

Sourcing & Purchasing?

Sourcing describes all those activities within the procurement process concerning identifying and evaluating potential suppliers, engaging with selected suppliers and selecting the best value supplier.The outcome of the sourcing process is usually a contract or arrangement that defines what is to be procured, on what terms and from which suppliers. Purchasing refers to the portion of the procurement cycle that is actively engaged in buying a product or service from a supplier. Think of purchasing as the transactional portion of procurement. If procurement is the subject, then purchasing is the verb. Tasks that directly relate to the process of how goods and services are ordered are purchased while activities such as strategic sourcing and vendor contract negotiation constitute procurement.

Quality Management?

Quality Management, the six Total Quality Management factors that are related to supply chain performance are leadership, strategic planning, human resources management, supplier quality management, customer focus, and process management.Strategic Supply Management initiatives include: Reducing supply bases and establishing closer relationships with their suppliers, Buyers are working closely with suppliers and potentially launching joint strategic projects, Earlier supplier involvement and joint problem-solving efforts, leading to the early discovery of quality problems ,Inter-firm production scheduling breaks down barriers between organizations, resulting in shorter production runs, and developing a favorable quality culture based upon top-management commitment to improving beyond organizational boundaries.

Introduction to Logistics Management?

Logistics management is a supply chain management component that is used to meet customer demands through the planning, control and implementation of the effective movement and storage of related information, goods and services from origin to destination. Logistics management helps companies reduce expenses and enhance customer service. The logistics management process begins with raw material accumulation to the final stage of delivering goods to the destination. By adhering to customer needs and industry standards, logistics management facilitates process strategy, planning and implementation.

Transportation?

Transportation is defined as the movement of people, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline and space. The field can be divided into infrastructure, vehicles and operations. Transportation is important since it enables trade between people, which in turn establishes civilizations. I find it an interesting point that transportation is an enabler of civilization, but this makes sense, as it enables the ability to trade and communicate.

Reverse Logistics?

Reverse logistics ae the set of activities that is conducted after the sale of a product to recapture value and end the product's lifecycle. It typically involves returning a product to the manufacturer or distributor or forwarding it on for servicing, refurbishment or recycling. Reverse logistics are sometimes called aftermarket supply chain, aftermarket logistics or retrogistics. The aftermarket processes that a product can undergo in reverse logistics are numerous and include: Remanufacturing, Refurbishment, Servicing, Returns Management, Recycling, Waste Management, Warranty Management, Warehouse Management.

Cold Chain?

The term cold chain or cool chain denotes the series of actions and equipment applied to maintain a product within a specified low-temperature range from harvest/production to consumption. A cold chain is a temperature-controlled supply chain. An unbroken cold chain is an uninterrupted series of refrigerated production, storage and distribution activities, along with associated equipment and logistics, which maintain a desired low-temperature range.

Inventory Management?

Inventory management is a discipline primarily about specifying the shape and placement of stocked goods. It is required at different locations within a facility or within many locations of a supply network to precede the regular and planned course of production and stock of materials. The concept of inventory, stock or work-in-process has been extended from manufacturing systems to service businesses and projects, by generalizing the definition to be "all work within the process of production- all work that is or has occurred prior to the completion of production".

Introduction to Warehouse?

A warehouse is a building for storing goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial parks on the outskirts of cities, towns or villages. They usually have loading docks to load and unload goods from trucks. Sometimes warehouses are designed for the loading and unloading of goods directly from railways, airports, or seaports. They often have cranes and forklifts for moving goods, which are usually placed on ISO standard pallets loaded into pallet racks.

Warehouse Process?

The six fundamental warehouse processes . Optimizing these six processes will allow you to streamline your warehouse operation, reduce cost & errors, and achieve a higher perfect order rate. They are : 1. Receiving 2. Put-Away 3. Storage 4. Picking 5. Packing 6. Shipping

Warehouse VAS?

A value-added service (VAS) is a popular telecommunications industry term for non-core services, or, in short, all services beyond standard voice calls and fax transmissions. However, it can be used in any service industry, for services available at little or no cost, to promote their primary business. In the telecommunications industry, on a conceptual level, value-added services add value to the standard service offering, spurring subscribers to use their phone more and allowing the operator to drive up their ARPU. For mobile phones, technologies like SMS, MMS and data access were historically usually considered value-added services, but in recent years SMS, MMS and data access have more and more become core services, and VAS therefore has begun to exclude those services.

MHE, Safety & Security?

Material handling equipment (MHE) is mechanical equipment used for the movement, storage, control and protection of materials, goods and products throughout the process of manufacturing, distribution, consumption and disposal.The different types of handling equipment can be classified into four major categories:transport , positioning , unit load formation , and storage . MANAGING WAREHOUSE SAFETY AND SECURITY There are many warehouse management procedures you can adopt today to better cultivate industry-leading safety and security. They are : Risk Assessments, Electric and hydraulic safety circuits within machine, Safety fencing and zoning ,Additional warehouse safety guarding.

E-Commerce?

E-commerce (electronic commerce) is the activity of electronically buying or selling of products on online services or over the Internet. Electronic commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. E-commerce is in turn driven by the technological advances of the semiconductor industry, and is the largest sector of the electronics industry.

ERP & TMS?

Enterprise resource planning refers to a type of software that organizations use to manage day-to-day business activities such as accounting, procurement, project management, risk management and compliance, and supply chain operations. A complete ERP suite also includes enterprise performance management, software that helps plan, budget, predict, and report on an organization’s financial results. A transportation management system is a subset of supply chain management concerning  transportation operations and may be part of an enterprise resource planning system. A TMS usually "sits" between an ERP or legacy order processing and warehouse/distribution module. A typical scenario would include both inbound (procurement) and outbound (shipping) orders to be evaluated by the TMS Planning Module offering the user various suggested routing solutions.

VMI?

Vendor Managed Inventory (VMI) and Collaborative Replenishment is a proven approach to streamlining inventory management and order fulfillment that improves collaboration between suppliers and their distribution partners by aligning business objectives and optimizing operations for all participants. You may be asking, what is the difference between VMI and Collaborative Replenishment. It’s simple, Collaborative Replenishment is an evolution of VMI that includes trading partners working together to ensure an efficient inventory management program. It goes far beyond the capabilities of what traditional VMI is thought of including things like truck building, available to promise and more. It offers companies more choices by enabling orders to be launched by any trading partner, offering multiple routes to market, and utilizing various types of demand signals. In all, collaborative replenishment is a more flexible approach to supply chain management, but at is core Collaborative Replenishment includes VMI and all its benefits.

VISIT?

As part of the Warehousing module on both the Logistics and Supply Chain Management MSc and the Procurement and Supply Chain Management MSc programmes, students have the opportunity to visit a choice of warehouses in the local Milton Keynes area. By visiting the warehouses, students are able to experience the processes and operations within a warehouse first hand and see the practical application of knowledge and skills developed on the course.
Logistics Management

LOGISTIC MANAGEMENT

Introduction to logistic management

Logistics management is a supply chain management component that is used to meet customer demands through the planning, control and implementation of the effective movement and storage of related information, goods and services from origin to destination. Logistics management helps companies reduce expenses and enhance customer service.

The logistics management process begins with raw material accumulation to the final stage of delivering goods to the destination.

By adhering to customer needs and industry standards, logistics management facilitates process strategy, planning and implementation.

Logistics management involves numerous elements, including:

  • Selecting appropriate vendors with the ability to provide transportation facilities
  • Choosing the most effective routes for transportation
  • Discovering the most competent delivery method
  • Using software and IT resources to proficiently handle related processes

In logistics management, unwise decisions create multiple issues. For example, deliveries that fail or are delayed lead to buyer dissatisfaction. Damage of goods due to careless transportation is another potential issue. Poor logistics planning gradually increases expenses, and issues may arise from the implementation of ineffective logistics software. Most of these problems occur due to improper decisions related to outsourcing, such as selecting the wrong vendor or carrying out delivery tasks without sufficient resources.

To resolve these issues, organizations should implement best logistic management practices. Companies should focus on collaboration rather than competition. Good collaboration among transportation providers, buyers and vendors helps reduce expenses. An efficient and safe transportation provider is also vital to business success.

 

Importance of logistics management

Effective logistics management is important to companies for a number of reasons, both positive and negative.

Good logistics management ensures that products are shipped in the most economical, safe, efficient and timely manner. This results in cost savings for the company and more satisfied customers.

In contrast, poor logistics management can result in damaged or delayed shipments, which can then lead to dissatisfied customers, returns and scrapped products. The consequences of these problems include higher costs and customer relation problems. In order to avoid these results, effective logistics management includes careful planning, proper software system selection, proper vetting and selection of outsourced vendors, and adequate resources to handle the processes.

Logistics management functions

To varying degrees, logistics management functions include customer service, sourcing and procurement, production planning and scheduling, packaging, and assembly. Logistics management is part of all the levels of planning and execution, including strategic, operational and tactical.

Further, it coordinates all the logistics activities, and it integrates logistics activities with other functions, including marketing, sales, manufacturing, finance and information technology.

Logistics management process

Logistics management generally consists of processes for inbound and outbound logistics traffic. Inbound logistics is the process of moving goods from suppliers into a warehouse, then into a production facility to make products. Inbound logistics can include raw materials, tools, component parts, office equipment and supplies. Outbound logistics is the process of moving finished products out of warehouse inventory and shipping them to customers.

Here are some examples: For a computer manufacturer, inbound logistics might involve electronics parts, computer chips, cables, connectors, moulded casings and shipping cartons. Outbound logistics involves the finished computer and associated peripheral devices. Meanwhile, for a furniture manufacturer, inbound logistics could involve wood, glue, fabrics, screws, nails, paint and safety glasses, while outbound logistics would involve the finished furniture.

Inbound Logistics

Inbound Logistics is more related to Material Management and Procurement where the incoming delivery of raw materials and spare parts, from the suppliers to the manufacturing plant is called inbound logistics. It focuses on the movement of raw materials within and to the manufacturing plant. The interaction involves a supplier or vendor and the firm.

In easy terms, Inbound Logistics is the primary activity, which focuses on purchasing and scheduling the inflow of materials, machines and final goods, from suppliers to the production unit, warehouse or retail store.

Inbound logistics includes all those activities, which are necessary to make the goods available for operational processes, at the time of their requirement. It includes materials handling, transport, stock control, and inspection etc. to facilitate, the production or market distribution.

Basic process

Initiates with sourcing the list of items needed for the manufacturing plant then a purchase order is created against those items for a choice of the vendor. Once the selection of supplier, negotiation on price and the delivery date is fixed; the next step is to progress with the transportation of those items to the local warehouse and collect them.

Outbound Logistics

Outbound Logistics is related to Customer Service and Distribution Channels. The outward movement of final or finished goods, from the company to the end user, is known as Outbound Logistics. It concentrates on the transportation of finished goods or product from the company to the final consumer. The interaction is usually between the firm and the customers.

Unlike Inbound Logistics that fundamentally focuses on purchasing and directing the inbound movement of products, parts, materials and finished inventory from suppliers to warehouses or manufacturing plants, Outbound Logistics is a whole other separate set of processes. This part of logistics relies profoundly on transportation and storage of finished goods. Typically, it is centred on two concepts, that is, warehousing and transportation.

Basic process

The finished products are stored in the warehouse and on the receiving of customer order or delivery order dispatch process is initiated. Then the transportation selection is made based on the volume of the goods, urgency, and the location the delivery is made to the end user.

8 Must Have Features For Logistics and Supply Chain management Software

The logistics industry has evolved to such an extent that a countries economy today is majorly based on its performances. Companies, therefore, are very much engaged in implementing the best tools possible that offers a range of capabilities for its success.

It’s imperative to mention that for any logistics or supply chain management company who are operationally involved in the planning, procurement and distribution require a highly robust and functional management tool.

Several companies are focusing more on logistics management software or freight forwarding software to maximize customer value and thereby drive competitive advantages. Some of the tools provide the much-required support for goods transportation, inventory, warehousing, and a robust logistics network design that helps in linking the flow of goods, information and perfect control over finances.

Let’s say your organization may be interested in developing an in-house software solution or even the easiest being to procure one, there are certain features which are a pre-requisite for optimum results.

  1. ORDER MANAGEMENT:Order and billing management is always of top priority for operation managers and the more efficient it is lesser the headache. It is always preferred to have a centralized order and billing management capabilities and the more flexible it is will guarantee that the solution is capable of meeting all unique requirements.
  2. INVENTORY MANAGEMENT:One of the most important aspects of logistics and supply chain management is to optimize inventory management. It helps in ensuring that your organization is equipped in storing stock of goods, raw materials, supplies and are made available whenever it is required. real-time tools can allow companies to make the right decisions thereby ensuring the proper flow of goods.
  3. FORECASTING:Any industry needs to have the capability of forecasting demand so that it can plan its resources likewise. Forecasting allows companies to procure what is required thereby removing the need to buy too many raw materials or even store finished goods.
  4. WAREHOUSE MANAGEMENT:Stock management is an integral part of supply chain management. A good warehouse management software allows organizations to optimize its stock that will enable an increase in accuracy and overall efficiency ensuring needs are met in a timely and cost-effective manner.
  5. E-COMMERCE INTEGRATION:E-commerce is surely the way ahead and with this subset fo the logistics industry growing manifold it seems extremely important that your logistics software provides all the essential tools to integrate E-commerce into its platform.
  6. REAL-TIME VISIBILITY:Technology and in particular the growth of the internet has given the ability to be able to stay connected all the time. In this logistics industry what is most important is the connectivity and the ability to keep track of the cargo movements. Hence a comprehensive end to end supply chain visibility is the most essential feature a supply chain management softwareshould be capable of.
  7. ANALYTICS:Data forms a major part of any business that empowers you to be able to analyze your performances and evaluate your processes. Analytical tools offer logistics and supply chain operations to capitalize on existing data and make the necessary adjustments to optimize operations.
  8. MOBILITY:Today is the time when technology can be used at multi-levels to achieve the best operational outcomes. Mobility solutions, particularly in the supply chain business, can bring maximum advantages in enhancing the business management process. Providing real-time alerts via mobile apps to stakeholders can solve minor bottlenecks before it gets converted into major ones