Management of Supply Chain

The advancement that has taken place in the business environment has directed companies’ focus towards improvement of their flexibilities and efficiency. This involves developing strategies that would help improve management of raw materials, processing and distribution to the final user. On the basis of these noble roles, supply chain participants include vendors who provide raw materials, facilities that transform the raw materials into final products and outlets and distribution channels.  Supply chain management (SCM) have helped organization integrate their manufacturing, marketing, planning, purchasing and distribution and hence improved competitiveness in their operations. Globalization and the companies focus towards performance-based competition in addition to the ever dynamic economic and competitive environment have necessitated proper management and a smooth supply chain. The techniques deployed have mainly attempted to improve flexibility and distribution channels. This have been a priority for both profit and not-profit organization and managers have to make decision on structures that will help proper connections in implementations, capabilities and competencies in the SCM. To improve corporate performance, companies need to make critical decision that will give them a competitive edge. Such decision are either operation or strategic. Non-profit organization can use strategic decision on long term matters that are likely to affect their operations in future and are closely linked to corporate strategies. Their decision help to guide supply chain policies from a design viewpoint.  On the other hand, operation decision relates to the daily operation and can help non-profit organization to monitor their daily activities. These decisions targets improvements of efficiency and effectiveness in the flow of the company’s products. These techniques when used in supply chain revolve around the locations, productions, inventories and distribution. In the design of the SCM, the stocking areas, placement of the productive facilities and the sourcing points forms the areas of concentrations. Placement of any non-profit organization should be considered in the long term plans. Factors such locations, number and the size of the production facilities have a lot of influence on the possible routes by which products flow to the customers. Accessibility of the market determines the levels of service delivery and the cost incurred and also provides an optimization technique. Techniques are also designed so as to come up with the products to produce, the plants to produce them and how the raw materials would be sourced and distributed among the various suppliers. These techniques determine the specific path that the product flows from the suppliers, through the facilities to the final suppliers. Among the objectives here is to determine the production capacities of the available facilities which to a higher extent depends on the extent of vertical integrations within the company. For consistency and continuity in production, a non-profit organization can be able to develop a production schedule such as master production schedule and maintenance of equipments. A major concern is also placed in quality control and workloads balancing. Proper management of inventory is necessary in non-profit organization because it helps to hold cost as low as possible. In this case, the focus is on the finished, raw materials and the semi-finished goods. Ideally, inventory holding may increase the cost by up to 40% of the inventory cost and hence their management is relevant in the supply chain management and operations. The policies developed in this case focus on the optimal reorder points, order quantity and safety stock levels in every production process. A vendor managed inventory is a major technique that helps companies to prevent stock-outs. In this case, vendor plays a major role in determining the quantities to be demanded by its downstream clients. In most cases, transportation cost accounts for more than 30% of the logistic costs and therefore prudent to consider. The mode of transport that a non-profit organization adopts will largely depend on the distribution of their customers and the customer service levels intended. The choices are made amongst land, sea and air, while putting into considerations the reliability, cost and speed. Routing, shipment sizes and equipment scheduling may be considered as critical areas of the effective and efficient management of a company’s transportation strategies. Organizations also adopt network designs in their supply chain to help add value to the company. These designs have had spectacular achievements in companies such as Dell by establishing distribution and manufacturing strategies into the future. These strategies are indispensable even for the non-profit organizations which face similar needs as other organizations for integrated decisions which involve location, transportation, inventory and location. Majority of these models are however difficult to get optimality; are deterministic and where stochastic, they are quite restrictive. Rough cut is a “multi-echelon” technique that helps in the inventory control. Its plunge is to provide inventory control policies by focusing on different echelons concurrently.  Though complex, the technique has been very successful. It makes use of complex data structure and efficient algorithms to enable large scale system integrations. This therefore is a potential alternative to any non-profit organization in their aspiration to keep their inventory costs as low as possible. The companies should however evaluate the relationships that exist among the inventory, transportation and customer service before implementing any of these techniques.  Any non-profit organization should therefore embarking on nay techniques that would enable it achieve its objectives more effectively and efficiently. Cost minimization and customer service seem to be priorities in any supply chain management. The benefits that may accrue to such an organization relates to goal orientations, supplier selection and evaluation, strategic alliances and also improved performance.