The supply chain is a term that refers to the process by which products, information and financial resources are moved from the supplier to the end consumer. In many cases, there is a varying number of intermediaries such as manufactures, retailers and wholesalers. This system has to be managed in optimized fashion so as to maximize the returns to the business. Supply chain optimization is something that every business needs to take seriously.
A number of factors determine the complexity of a supply chain. These include, for instance, the type of business in question, the processes that have to be carried out for the product to reach the consumers, the size of the market (local or international) and the type of technology that is employed. The advancement in technology that has taken place in recent times has helped increase the interaction between the major players (manufactures, suppliers, retailers and consumers).
One has to use a various tools and process to achieve optimization. Some of them include tools that minimize operation costs (manufacturing, transport, storage and so on), inventory management tools and monitoring and evaluation processes to determine the progress being made. Regardless of what is done, the aim is to have products delivered to the end consumer by incurring the lowest costs possible while reaping as much profit as possible.
Mobile-based technology has been widely adopted by many of the players in supply chains. The technology has helped increase the efficiency in the processes. Some of the areas in which it has been most useful include the facilitation of field sales, provision of direct services and in marketing. The technology makes it possible to transmit important product information (content, origin and manufacturing methodology) to all the players.
An important principle in optimization is predetermination of demand. This has to be done as accurately as possible by considering historical demand and predicting future trends. The approach can be used for single items or for aggregated data such as groups of consumers, types of merchandise and so on. With the information obtained, the business can determine the stock levels to be maintained both for products with erratic demand as well as those with stable demand.
Before embarking on the exercise, you need to analyze your strengths as a company. Results are likely to reveal areas that you perform better than others. For the areas in which you may not be doing so well, consider outsourcing. There are many firms that are specialized in one or two tasks on the supply system hence are likely to have greater efficiency than a company that has to handle everything.
Bear in mind that the process of optimization is fairly long and frustrating. As you plan to make changes to the process strive to have a global mindset. This means that you should consider all the aspects of the chain even as you plan on making changes on one or a few areas. For instance, if you are going to make changes in manufacturing, other areas such as marketing, transportation and distribution will also be affected.
Optimization of a supply chain brings with it numerous benefits. One of them is that the operation costs are significantly reduced. Increased predictability of product demand by suppliers translates into better customer service. Increased collaboration among the players helps reduce the inventory faster than in cases where such cooperation is non-existent.
A number of factors determine the complexity of a supply chain. These include, for instance, the type of business in question, the processes that have to be carried out for the product to reach the consumers, the size of the market (local or international) and the type of technology that is employed. The advancement in technology that has taken place in recent times has helped increase the interaction between the major players (manufactures, suppliers, retailers and consumers).
One has to use a various tools and process to achieve optimization. Some of them include tools that minimize operation costs (manufacturing, transport, storage and so on), inventory management tools and monitoring and evaluation processes to determine the progress being made. Regardless of what is done, the aim is to have products delivered to the end consumer by incurring the lowest costs possible while reaping as much profit as possible.
Mobile-based technology has been widely adopted by many of the players in supply chains. The technology has helped increase the efficiency in the processes. Some of the areas in which it has been most useful include the facilitation of field sales, provision of direct services and in marketing. The technology makes it possible to transmit important product information (content, origin and manufacturing methodology) to all the players.
An important principle in optimization is predetermination of demand. This has to be done as accurately as possible by considering historical demand and predicting future trends. The approach can be used for single items or for aggregated data such as groups of consumers, types of merchandise and so on. With the information obtained, the business can determine the stock levels to be maintained both for products with erratic demand as well as those with stable demand.
Before embarking on the exercise, you need to analyze your strengths as a company. Results are likely to reveal areas that you perform better than others. For the areas in which you may not be doing so well, consider outsourcing. There are many firms that are specialized in one or two tasks on the supply system hence are likely to have greater efficiency than a company that has to handle everything.
Bear in mind that the process of optimization is fairly long and frustrating. As you plan to make changes to the process strive to have a global mindset. This means that you should consider all the aspects of the chain even as you plan on making changes on one or a few areas. For instance, if you are going to make changes in manufacturing, other areas such as marketing, transportation and distribution will also be affected.
Optimization of a supply chain brings with it numerous benefits. One of them is that the operation costs are significantly reduced. Increased predictability of product demand by suppliers translates into better customer service. Increased collaboration among the players helps reduce the inventory faster than in cases where such cooperation is non-existent.
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