This article is intended to assist you in understanding supply chain management. Supply Chain Management includes all the activities a business employs to keep its products and services moving efficiently. The velocity of a firm’s supply chain is core to its cash flow lifeline. Businesses from manufacturers , wholesalers & retailers , distributors etc. use supply chain principles to plan , assemble , store , ship , and track products from the beginning to the end of the supply chain.
Supply Chain is recognized as one of the key organization functions along with sales / marketing , R&D , and finance to the point that supply chain execution is treated as competitive point of difference.
Supply Chain Management encompasses collaboration & integration with suppliers , distributors / manufacturers (internal & external) , and customers . The success of a supply chain and the benefits it can provide is predicated on the strength and efficiency of the linkages between each of the key functions , including:
“ Supply Chain is the Execution Music of a company’s sales and marketing effort”
There is a need and skills gap that has evolved for employers that require associates to have multi functional , critical thinking skills. Multi Level communication and leadership skills are more important than ever in this highly competitive , global environment to every organization.
Businesses are looking for supply chain professionals to continuously increase the organization’s capability by reducing costs , improving the efficiency of relationships internal and external , and increasing capacity all at the same time.
Supply Chain Management professionals meet the growing demand and challenge of constant product profile updates while at the same time improving cash flow.
If your business is considering upgrading your supply chain management, please contact us
When selecting a transportation provider many companies are torn between selecting a third party logistics company or (3PL) or working directly with providers.
1. Purchasing power of a larger procurer of freight providers to provide the lowest cost rates and best service for the purchaser of services.
2. High investment in information technology to provide efficient ability to track pick-up and delivery, consolidate multi-company merchandise into efficient truckload mode versus LTL pricing, and integrate with multi-client ERP applications to present a seamless order management system to the user base.
3. Provides the opportunity for a firm to reduce the transportation management overhead associated with managing its pick-up and delivery process.
1. Direct engagement and contact with the transportation provider network. Those companies that actually deliver product and directly maintain physical (tractors & trailers) & human (drivers) assets. This allows for direct rate and service negotiation to assume best price and delivery experience without paying additional 3PL management fees.
2. “Doesn’t put all the eggs in one basket”——a contract with a 3PL provider is typically a multi- year engagement. Although significant time and effort can be spent on contracts, there are always multiple interpretations on the verbiage which presents the opportunity of cost and service expectations not to be met.
3. The technology investment spent to integrate with 3PL systems can be invested in the firm itself to mitigate a “hostage” situation from the 3PL & provide high flexibility to the firm to manage its own transportation network.
Firms should approach and evaluate its current transportation management process in the following way:
1. How should firms direct its human resource base:
a) Investing in its own or 3PL technology
b) Build its own internal management or purchase managed services
2. 3PL versus Direct purchase :
a) If the firm is not satisfied with the 3PL performance , does it have a pragmatic out from the agreement
b) Is the firm aware of the asset based companies to manage the process itself
a) Is transportation a core component of a company’s business plan critical to customer satisfaction and profit margin management