In a global complex and competitive market, there is a great deal of confusion regarding exactly what supply chain management involves. In fact, most people using the name supply chain management treat it as a synonym for logistics or as logistics that includes customers and suppliers. However, successful supply chain management requires cross-functional integration of key business processes within the firm and across the network of firms that comprise the supply chain. The challenge is to determine how to successfully accomplish this integration. A framework for supply chain management is presented as well as suggestions for how it might be implemented. For every successful strong and progressive supply chain mechanism within the value chain of every organization to be seen as a standard operative procedure, these below seven strategies must be carefully planned and implemented.
The Customer Relationship Management Process
The customer relationship management process provides the structure for how relationships with customers will be developed and maintained. The goal is to segment customers based on their value over time and increase customer loyalty by providing customized products and services. Detailed descriptions of the strategic and operational sub-processes that comprise customer relationship management and how it impacts on the overall goal are provided to enable fellow-ups. Also descriptions of the interfaces that are necessary with the other seven supply chain management processes as it relates to the corporate functions.
The Supplier Relationship Management Process
The supplier relationship management process provides the structure for how relationships with suppliers will be developed and maintained. Close relationships are developed with a small set of key suppliers based on the value that they provide the organization over time, and more traditional relationships are maintained with the others. In this scope, detailed descriptions of the strategic and operational sub-processes that comprise supplier relationship management are provided.
The Customer Service Management Process
Customer service management is the supply chain management process that represents the firm’s face to the customer. The process is the key point of contact for administering product and service agreements (PSAs) developed by customer teams as part of the customer relationship management process. The goal is to provide a single source of customer information, such as product availability, shipping dates and order status. Customer service management requires a real-time system to respond to customer inquiries and facilitate order placement. In this phase, we should describe the customer service management process in detail to demonstrate how it can be implemented and managed. To do this, we detail the activities of each strategic and operational sub-process; evaluate the interfaces with the unites of business functions
The Demand Management Process
Demand management is the supply chain management process that balances the customers’ requirements with the capabilities of the supply chain. With the right process in place, management can match supply with demand proactively and execute the plan with minimal disruptions. The process is not limited to forecasting. It includes synchronizing supply and demand, increasing flexibility, and reducing variability. Here emphasis is on the demand management process in detail to show how it can be implemented within a company and managed across firms in the supply chain. We examine the activities of each sub-process; evaluate the interfaces with corporate functions, processes, and firms; and provide examples of successful implementation.
The Order Fulfillment Process
Order fulfillment is a key process in managing the supply chain. It is the customers’ orders that put the supply chain in motion, and filling them efficiently and effectively is the first step in providing customer service. However, the order fulfillment process involves more than just filling orders. It is about designing a network and a process that permits a firm to meet customer requests while minimizing the total delivered cost. It needs to be implemented cross-functionally and with the coordination of key suppliers and customers. In order fulfillment process we are meant to show how it can be implemented within a company and managed across firms in the supply chain. The activities of each sub-process are examined; the interfaces with functional silos, processes and firms are evaluated; and, examples of successful implementations are provided.
The Manufacturing Flow Management Process
Manufacturing flow management is the supply chain management process that includes all activities necessary to obtain, implement, and manage manufacturing flexibility in the supply chain and to move products through the plants. Manufacturing flexibility reflects the ability to make a variety of products in a timely manner at the lowest possible cost. To achieve the desired level of manufacturing flexibility, planning and execution must extend beyond the four walls of the manufacturer. In the process we place the manufacturing flow management process in detail to show how it can be implemented within a company and managed across firms in the supply chain. Reduce time, ensure quantity and quality at a lower possible cost.
The Product and Commercialization Process
Product development and commercialization is the supply chain management process that provides structure for developing and bringing to market new products jointly with customers and suppliers1. Effective implementation of the process not only enables management to coordinate the efficient flow of new products across the supply chain, but also assists supply chain members with the ramp-up of manufacturing, logistics, marketing and other related activities to support the commercialization of the product. Information and process flow must be well planned bearing in mind market terrain and peculiarities
The Returns Management Process
Returns management is the supply chain management process by which activities associated with returns, reverse logistics, gate-keeping, and avoidance are managed within the firm and across key members of the supply chain. The correct implementation of this process enables management not only to manage the reverse product flow efficiently, but to identify opportunities to reduce unwanted returns and to control reusable assets such as containers. Efforts should be made to ensure proper documentation for reference purposes and re-calls should be properly planned to determine what actually led to the re-call to avoid further occurrences.
Conducting Assessments of the Supply Chain Management Processes
The eight supply chain management processes provide a comprehensive framework to guide cross-functional teams in their efforts to achieve the integration necessary for managing relationships with customers and suppliers. However, the successful implementation of any of the supply chain management processes requires that management from all corporate functions understand their role in the process. The challenge is finding a way to bring all the necessary parties together and start the dialogue. Remember you have accounts department to contend with and other cross functional wall within the whole entity.
Mapping for Supply Chain Management
As supply chain network structures become more complex and geographically dispersed, management can benefit from developing a relationship-based map of their company’s supply chain. The visual representation and analysis of the complexities of a firm’s direct and indirect supply chain relationships serves as a starting point for increasing the cross-functional and cross-firm communication that is necessary for the implementation of the supply chain management processes. The mapping effort also enables management to identify internal and external improvement opportunities and establish the critical relationship linkages that must be closely managed. Once a relationship-based map is developed, a wide variety of activity-based mapping techniques can be used to identify and realize improvement opportunities across the network of companies that constitute the supply chain.
Lean Thinking and Supply Chain Management
Lean thinking provides principles and tools used to eliminate waste and to strive for perfection through continuous improvement. Though lean thinking was conceptualized to apply to all activities within the firm and across companies in the supply chain, usually lean is employed in operational settings within a single firm. Lean thinking in supply chain management is the use of lean principles to align activities across corporate functions within the firm and to manage business relationships with customers and suppliers. We show how lean principles and tools can be used in the context of the supply chain management framework. Also, we describe forms of waste that need to be eliminated in order to create the greatest value for the end-customer.
Implementing and Sustaining the Supply Chain Management Processes
There are eleven management components that must be considered in order to implement the eight supply chain management processes. The management components apply to all the supply chain management processes. In this chapter, we describe each of the management components as well as how they can be used to coordinate implementation of the supply chain management processes and institutionalize the processes once they are implemented.
The Collaboration Framework
The Partnership Model should be used to structure relationships with key customers or suppliers where there is a history of working together and both sides view the relationship as having the potential for partnership. But, what should management do if these conditions are not met? To be successful, business-to business relationships require that each side clarifies their expectations and mutually agree on goals for the relationship.
Improving Performance Through Value Co-Creation with Key Customers and Suppliers
Central to the relationship view of supply chain management described in this article is the recognition that businesses should be managed in a way that enables value co-creation with key customers and suppliers. Opportunities for value creation arise when the capabilities and knowledge that exist within each firms’
More value is co-created in business-to-business (B2B) relationships where cross-functional, cross-firm teams are implemented and financial measurement of value changes both management perceptions and behaviors towards customers and suppliers.
All these put together and effectively pursued as the standard operating procedure will definitely play a huge role in a strong and progressive value management system of any company that thinks about tomorrow and places the company on a good status of sound corporate governance and on a solid path to profitability.
Refrences= Mapping for Supply Chain Management”, Chapter 11, in Douglas M. Lambert, Editor, Supply Chain Management: Processes, Partnerships, Performance, Fourth Edition, Sarasota, Florida: Supply Chain Management Institute, 2014
Written by Dr. Chika Ugo (ACIPS, ACILT, ACIWMM)