So what is supply chain management.
Well supply chains make and deliver things you might not know it.
But most of us make something everyday to help visualize this.
Let’s take a simple thing.
Many of us have made for a sandwich.
You can have it later today when you get to the office.
So what do you need to make that sandwich.
Well I guess it depends.
But let’s make a really good turkey bacon Swiss sandwich will need fresh bread.
Some high quality sliced turkey a nice slice of Swiss cheese and some delicious bacon.
All right let’s add some lettuce tomato and mayo.
So how do we begin in supply chain management.
We start with purchasing.
Some people call it procurement.
So what’s your favorite grocery store.
Why do you like them even if you like them.
They may not have all the ingredients you want for your sandwich.
Maybe you want the bread from your favorite bakery perhaps the best veggies come from the farmer’s market.
In any case you have your preferences.
You had a budget and for some of you you just needed to buy your stuff from the most convenient grocer.
In any case procurement of your materials is now complete.
Let’s move on to stage two of supply chain management manufacturing and operations.
This is the part where you’ve moved from gathering your materials to actually making something.
Time to put the sandwich together but it’s getting late.
You have to hurry to get to work on time.
Still you want toast bread the bacon needs to be cooked Plus you need to slice the veggies.
Don’t forget to put away the leftovers and clean up that mess.
Doing these things the right way.
Doing them quickly and being able to do this on a day to day basis.
That’s what the folks in operations are doing every day.
Without them there is no sandwich.
Not quite done yet though.
The third stage of supply chain management is logistics and transportation.
You can’t take the sandwich to work like that.
How do you protect it from the outside world.
How can you ensure it will be fresh and yummy.
Three or four hours from now where will you store it at the office and how we actually get to the office.
So it’s going with you.
So transportation is taken care of but packaging and containerization need to be considered.
Do you have those things available.
Is that a brown bag or plastic bag.
How do you plan to transport this thinking through the transportation containerization is something
you’ll want to think about for the future.
When you repeat this process Congratulations.
The supplies have been turned into a wonderful sandwich.
That is where you want it when you need it.
That’s what supply chains do.
They buy things make things and move things.
But that was one sandwich.
How about if you had a restaurant that made hundreds of sandwiches a day.
How about if your restaurant wanted to offer all sorts of sandwiches and sights.
What if someone wants to place special order.
What if customers want organic ingredients from a socially responsible supplier that is local.
What if the health inspectors require certain ways to clean and store food.
What happens if you plan on delivering food to customers.
Is your company prepared to deal with all of those issues.
Supply chain managers are ready for all of that.
That’s what they think about.
That’s what they do procurement operations and logistics.
These are the primary parts of a modern supply chain.
Every product has a story.
It’s supply chain managers job to write that story and give it a happy ending.
So let’s turn you into a storyteller.
Consider one of your favorite purchases your car your phone a shirt a meal or maybe a stay at a nice
resort where all the important characters in giving that story a happy ending.
Who purchased the raw materials parts or ingredients.
Why was that important and ultimately making you happy.
Which characters took those materials and made them into what you wanted.
What were the important elements in actually getting the item or service right to you the happy ending
to your purchase was what you expected when you made the purchase but now it’s a supply chain manager.
You begin to understand the skill dedication and collaboration that was required to make you and all
of those customers happy.
Getting the right thing to the right place at the right time.
That’s what supply chains are all about.
Perhaps you’re saying yourself hey I’m in the supply chain.
Or maybe you thought we have that in our company.
I work with those guys.
Wait that’s supply chain.
What’s the big deal.
Hasn’t that been around forever.
Well yes and no yes.
Humans have always done some sort of procurement operations and logistics.
But over time as communities develop in populations grew transportation and storage options improved.
And along the way the business community developed and then it expanded around the globe.
Look the basics are still true right item right place right time.
But in today’s global marketplace where materials come from all over the world and billions of customers
are on every continent.
Supply chains have become extremely complex.
In the old days companies had procurement operations and logistics departments.
But most of the time those folks were barely talking to each other.
Perhaps they yelled at each other.
Collaboration probably wasn’t even in their vocabulary.
That’s where supply chain management comes in.
It’s not really supply chain management.
Without integration I mean how can you really manage a global chain if supplies being passed from purchasing
to operations to logistics unless they are collectively looking at data and developing integrated plans
those integrated plans help companies buy the right amount of materials hire the right number of workers.
It also helps them develop production plans.
It even helps them develop delivery itineraries meaning it helps them build a schedule for when and
where items will be picked up and delivered.
So is that modern supply chain management.
Not quite modern supply chain management extends beyond purchasing operations and logistics.
Who else is involved.
Well without marketing and I.T. we can’t get the data needed to develop those integrated plans.
Engineers and designers they tell supply chains how to make the products customers want accounting accounting
can help us discover opportunities to cut costs.
Finance Well we need the money to buy materials build plants hire workers everything in the supply chain
costs money finance the supply chain must work together to create a budget that will maximize our return
on investment in the global marketplace continues to evolve.
Supply chain managers will be responsible for dealing with increased demand as populations grow the
shrinking amount of global resources.
The rapid pace of technology and supply chain partners that may not share our customers values.
So which problems could supply chain integration help yourself.
That’s up to you.
But let’s think of it this way.
Most of us are asked to hit our number at work everyday.
The focus is on you or your department.
That’s not an integrated mindset.
You’re part of a chain a supply chain.
So while making your links strong is important the whole chain needs to be strong.
Instead of thinking only about your numbers think about how you can improve the numbers of your customers.
Think about how you can help your supplier improve their numbers.
Think about how you can help marketing improve their numbers.
Not only will your office start to become a brighter place you’ll be taking the first steps in making
your supply chain a modern integrated supply chain and very likely soon you’ll find that innovation
and problem solving are just part of your supply chain routine.