Supply Chain Management, when successful, will take in to account the necessity to integrate activities in to key supply chain processes, rather than simply managing individual functions.

A successful integration effort requires collaboration between buyers and suppliers, as well as teaming up on the development of new products, sharing information, and developing common systems. Information must flow continually in order to operate a successful integrated supply chain. When it works effectively, this helps everyone attain the best product flows.

Implementing a process-based approach to SCM involves maintaining quality customer relationship and customer service management, order fulfillment, demand management, returns management, the development and marketing of products, supplier relationship management, as well as Manufacturing Flow Management.

Managing customer relationships entails taking care of customer information and maintaining positive liaisons between the customer and the company. This is also a way to ensure that the customer is always provided with the latest updates on products via interfaces with the firm’s production and distribution points. Effective customer service plans entail the making and meeting of goals that will satisfy both the company and the customer; making and maintaining relationships with the customer; and ensure that a positive feeling exists for both the customers and the company’s workers.

In collaboration with suppliers, strategic plans should be developed in order to aid the development of new products as well as the manufacturing flow management process. For international businesses, sourcing has to be managed on an international level. The outcome to be striven for is always a win-win one, in which both parties will prosper. It is also good to reduce times in the cycles of design and product development.

Suppliers and customers should work together in order to diminish the period of time it takes for a new product to arrive on the market. Product life cycles grow shorter and shorter at a rate that varies depending on the nature of the business; thus, it is essential for the different firms to work together in order to develop and launch new products according to strictly set out time schedules.

In order to stick to competitive principles, the management should strive to identify customers’ needs based on consultation with the customer relationship management; choose materials as well as suppliers in consultation with procurement; and develop the technology in manufacturing flow to make and integrate the best supply chain possible for that particular product and market.

Based on predictions rooted in the past, decisions on how the manufacturing process (i.e. getting supplies to the proper distribution channels, etc.) are to run shall be made. It is vital that such manufacturing process decisions be somewhat flexible in order to adapt to changes that occur within the particular market the company is operating in; the process should also be able to accommodate mass customization.

Distribution takes into account the flow of a final product from the factory to the customers. The customer is the marketing channel’s final product. In the realm of physical distribution, the availability of that product is a vital aspect of the marketing efforts. Customer service is also a key component of the process of distribution, as it is a vital part of marketing. Therefore, distribution links marketing to the customers for a given product; these customers might include retailers, wholesalers, or manufacturers.

In the past, certain services might have been provided in house, but it was later determined that it makes more sense to outsource that aspect of the production of a product or a service. This allows a company to focus exclusively on the production of those products or services that it knows best and will therefore bring it some advantage that outsourcing would not.

In recent years, outsourcing has been a particular trend in logistics. Overseeing transportation, inventory, and warehousing is increasingly a job that is subcontracted to those who specialize in these arenas. Managing this level of the supply chain depends on agreements among the various partners and suppliers. Central decisions must be made on a local level to ensure that day-to-day goals are met and that supplier performance is upheld to quality standards.

Competency in logistics has increasingly become a vital area in supply chain management. Thus, the measurement of logistics can mean the difference between a profitable operation and an unprofitable one. Those firms that regularly engage in a comprehensive degree of performance measurement are able to make improvements in their overall level of productivity, and hence help improve their profitability on a regular basis.

In the next article, we will learn about Supply Chain Management viz. Software and RFID Solutions.