Supply Chain Blog

This is my first article on SCM in this blog. I’ll try to address the issues related to supply chain in lucid way to make novice to understand the concepts clear and grasp the essence. What is Supply Chain ? Here goes the story of Elephant and Five Blind men in comparison with Supply Chain. Supply Chain consists of all functions involved directly (Sales, Production, Purchase, Inventory, Warehouse etc) or indirectly (HR, IT etc) in fulfilling customer request. Supply chain Management consists of three major components :- - Supply chain management is a set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores - merchandise is produced and distributed at the right quantities, to the right locations, and at the right time, in order to minimize system wide costs - satisfying (customer) service level requirements Let me explain the concept in a simple way. Consider Domino’s marketing department advertising that they can supply quality pizzas to their customers within 30 minutes against the order receipt. The company has issued guidelines to all departments to reduce the cost to increase the bottom line growth. If Logistics department which is responsible for distribution adhere to this guideline, it will jeopardize the marketing objective of delivering the product within 30 minutes. This is where the supply chain personal plays crucial role to integrate different departments to work towards company objectives by aligning the department objective with company objective. Supply chain process can be classified into three macro processes.

Integration among the three macro processes is crucial for successful supply chain management.

There are certain functions in an organization considered as core and others are supportive from Supply Chain Management perspective. Effective integration of these main and supportive functions lead to successful supply chain management.

Generic Supply Chain view from FMCG Sector

I will explain these concepts in my subsequent articles . SCM is the buzzword and emerging trend in the industry. Top Management team believes that effective supply chain is panacea for most of their maladies. It is true to certain extent. Success of Supply Chain depends upon the effective integration of various functions and to the extent the support it gets from top and other management personals in its decision making. Apart from this, there are other factors which are responsible for successful supply chain management. These will be discussed in latter issue. From Indian scenario, I feel we have not truly embraced the Supply chain concepts. Most of the companies viewing SCM as a remedy to their critical functions, rather than integrating and aligning all core and supportive functions. I would like to invite comments on this article. In the next issue I would like to share my view on Forecast & Demand Planning.

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