Inventory management aims to handle all function correctly with tracking and management of material. Inventory management is very wide definition like to replenishment lead time, carrying costs of inventory, asset management, forecasting, valuation, visibility, future inventory cost, space, quality etc. The ultimate aim of supply chain management is how well you manage your inventory. Manufacturers face a number of challenges which require not just exceptional planning but also an effective communication setup that keeps you updated at the spur of a moment. From rapid changes of customer demands, globalization or even natural calamities can cause your inventory to be stuck up paving way for no wages to the employees. Therefore there should be a quick information system to discuss the inbound and outbound issues affecting the demand and supply. For this there should be a well managed supply chain inventory management in order to keep the business running without any Continue reading
Supply Chain Management
Order-to-Cash Process – Meaning and Steps
Order-to-cash process consists of financial transactions with the customers in a supply chain. Order-to-cash process starts with the customer placing the order and ends with receiving the payment from the customer. The steps involved in the order-to-cash process are explained below. The order is placed by the customer directly through phone, fax, or the internet. Then, the inventory is checked for the availability of the product in the quantity required by the customer. The firm then checks the customer credit status to decide whether or not to extend credit to the customer. For this, the customer’s credit limit and the status of receivables from the customer are checked. If the customer has placed the order within the credit limits and has nil or permissible receivables, then the product can be delivered to the customer. If not, the firm has to evaluate whether to fulfill the order or to reject it Continue reading
Green and Sustainable Supply Chain Management
Environmental changes across the world have generated a movement to identify the causes of global warming and develop solutions to end it before it is too late. In an effort to achive this, many countries are creating laws and regulations with the specific aim to reduce carbon emissions and greenhouse gas effect. The truth is that environmental change is upon us. Not only do we have climate problems but we are also dealing with a resource depletion issue. With economies like India and China growing at near double digit rates, the population of the world continues to grow creating shortages of many resources that we use to take for granted. Many consumers, stakeholders and businesses are becoming more involved in the growing green movement. Influenced by customer loyalty shifting towards environmentally friendly products, businesses are trying more and more to make their supply chains greener by introducing sustainability strategies throughout Continue reading
Supplier Relationship Management (SRM) – Meaning and Importance
Supplier Relationship Management (SRM) is a concept in the Supply Chain Management, which considered in the aspect of establishing and sustaining the business relationship along the supply chain. Supplier Relationship Management (SRM) concerns the practical processes to integrate the communication and coordination between organizations and their suppliers. Supplier chain relationship was considered to be one of the important factors in most business, since it can influence the potential of supply chain concept. Now, the modern business seems to be more complex with high competition. Due to the information has more valuable in the supply chain management, firms then need to re-design the ways of managing and sharing information among each others. Organizations cannot independently run the business by themselves. Not only good relationship can help companies to have more competitive advantage to survive in the market, but it can also help companies expands the market too. Supplier Relationship Management (SRM) Continue reading
Introduction to Supply Chain Management (SCM)
Definitions of Supply Chain Management Supply chain management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers (Harland, 1996). Supply Chain Management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption (supply chain). Another definition is provided by the APICS (The Association for Operations Management) Dictionary when it defines Supply Chain Management as the “design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally.” Supply Chain Management (SCM) as defined by the Council of Supply Chain Management Professionals (CSCMP): “Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Continue reading
Case Study: Supply Chain Management of Walmart
The world’s largest retailer Wal-Mart was founded by Sam Walton in the year 1962. He opened his first store in Rogers, Ark. On 31st October 1969, the company was incorporated as Wal-Mart Stores. Key success factor was the guidance of Sam. Presently they are operating in fifteen countries with more than 8,000 stores with 2.1 million employees (2009). Major features of Wal-Mart stores are its store area, cleanliness and its shelves which is filled with varieties of quality items that includes health care products, family apparels, electronic items, automotive products, hardware items, jewelry etc. Wal-Mart is giving more emphasis for customer needs and tried to reduce cost through the effective usage of supply chain management system. In the year 2009, Fortune Magazine ranked Wal-Mart as first among other retailers in its survey. Sales were about 401 billion U.S dollars in the FY 2009. Sam Walton claims that Wal-Mart’s vision had Continue reading