A supply chain is the stream of processes of moving goods from the customer order through the raw materials stage, supply, production, and distribution of products to the customer. All organizations have supply chains of varying degrees, depending upon the size of the organization and the type of product manufactured. These networks obtain supplies and components, change these materials into finished products and then distribute them to the customer.
Managing the chain of events in this process is what is known as supply chain management. Effective management must take into account coordinating all the different pieces of this chain as quickly as possible without losing any of the quality or customer satisfaction, while still keeping costs down.
The first step is obtaining a customer order, followed by production, storage and distribution of products and supplies to the customer site. Customer satisfaction is paramount. Included in this supply chain process are customer orders, order processing, inventory, scheduling, transportation, storage, and customer service. A necessity in coordinating all these activities is the information service network.
In addition, key to the success of a supply chain is the speed in which these activities can be accomplished and the realization that customer needs and customer satisfaction are the very reasons for the network. Reduced inventories, lower operating costs, product availability and customer satisfaction are all benefits which grow out of effective supply chain management.
The decisions associated with supply chain management cover both the long-term and short-term. Strategic decisions deal with corporate policies, and look at overall design and supply chain structure. Operational decisions are those dealing with every day activities and problems of an organization. These decisions must take into account the strategic decisions already in place. Therefore, an organization must structure the supply chain through long-term analysis and at the same time focus on the day-to-day activities.
Furthermore, market demands, customer service, transport considerations, and pricing constraints all must be understood in order to structure the supply chain effectively. These are all factors, which change constantly and sometimes unexpectedly, and an organization must realize this fact and be prepared to structure the supply chain accordingly.
Structuring the supply chain requires an understanding of the demand patterns, service level requirements, distance considerations, cost elements and other related factors. It is easy to see that these factors are highly variable in nature and this variability needs to be considered during the supply chain analysis process. Moreover, the interplay of these complex considerations could have a significant bearing on the outcome of the supply chain analysis process.
There are six key elements to a supply chain:
The following describes each of the elements:
chain has also been called the value chain and the service chain,
on the "fad of the moment", or sometimes, we think, the weather, or sun
activity. Just like anything else, supply chain management is no
nor should it be embraced as a religion. It is an operational strategy
that, if implemented properly, will provide a new dimension to
competing: quickly introducing new customerized high quality products
and delivering them with unprecedented lead times, swift decisions, and
manufacturing products with high velocity.
Software companies have jumped on the bandwagon and attempted to claim SCM as their own. However, as with ERP investments, the reality doesn't match the hype. The true restructure of the supply chain starts with the physical elements, not the virtual. Information transfer is critical to swiftly moving parts through the chain of processes, but information is only one of six key elements.
delivery is critical in most markets today. Many companies address this
demand by carrying higher inventories. Inventory is a hedge against
time. Higher levels of inventory are often maintained because a company
unable to produce the material within the time demanded by the market.
the processes in the supply chain can identify the causes and
solutions to reduce overall throughput time. Compressing time in the
of events from the time a customer places an order until the order is
can provide a competitive edge without the burden of carrying excessive
Our Approach: A Comprehensive, Systematic Master Plan
A comprehensive and systematic master plan is needed to effectively manage a large-scale effort. Our Supply Chain Development Model(TM) provides state-of-the-art technical application tools and emphasizes a continuous improvement approach. This exclusive management transformation program creates a master plan that systematically enacts supply chain agility. It encompasses the full supply chain from customer through production, assembly, supply, warehousing, and distribution.
The task at hand is to optimize all six elements for velocity, flexibility, quality cost and customer service. We suggest companies start with a rigorous analysis of the current supply chain, assess their supply chain competitiveness, build a vision of what the new supply chain should look like, identify the performance gap, and develop an action plan to close the gap. Our approach, using our Supply Chain Development Model(TM), does exactly that. (Please see our supply chain management consulting services Supply Chain Management Consulting Services )
Rockford Consulting Group, Ltd. can provide long-term assistance to many companies in a variety of industries. The firm has a cadre of the best supply chain consultants in the world today, providing high quality professionalism through the use of experience and innovation.
We subscribe to the Institute of Management Consultants Code of Professional Conduct. All consultants engaged on projects adhere to its principles. Whenever possible we will use consultants certified in their particular specialty area. Certification assures that consultants have substantial prior experience in their specialty, and their competencies have been tested by the IMC, and verified by a number of clients. This assures our clients that we are assigning the highest qualified consultants in the profession.
We provide technical expertise, team facilitation, leadership, and direction in deciding how you will meet the challenge. We refer you to our Qualification Statement for further details on our background, areas of specialization, concepts and technologies applied, staffing, operating policy, approach, companies and industries served, case studies and references. Equally as important, we train our clients to sustain new methods of manufacturing and the consequential benefits over time. Your company will benefit directly from this training.
We have achieved an efficiency in our approach to assignments that allows us to provide high quality technical and managerial advice in a much shorter amount of time than could be accomplished years ago. We are able to do this because of the extensive consulting experience that each of our specialists has.
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