Globalization has changed the way we do business. Today, we perceive and pursue opportunities differently. Our enterprises are expanding beyond our geographical limits into the low cost regions for manufacturing processes. But such expansion has its own risks. With dispersion comes lack of visibility, dwindling control, and difficulties in general management. So what do we do then? Should we give up on a business model that reduces costs and promotes inclusive growth?
Of course not! What you need is a good supply chain management (SCM) solution that forms a hierarchy of processes for better management. An SCM solution links activities like planning, purchasing, inventory, production, logistics, etc and streamlines them.
Supply chain management is an integral part of your business strategy, especially if you are aiming to grow beyond your geographical boundaries. To state the truth while still being humble, your supply chain management will dictate your level of success.
With an SCM in place, you can make changes to your individual level functions and integrated activities in your supply chain process. You can decrease your operational costs, mitigate operational risks better, boost revenues, and earn competitive edge. Your business can scale greater heights with the right combo of supply chain conduit strategy and solution.
So then what constitutes a good SCM solution? We believe that the following features should be a part and parcel of a good SCM.
Inventory is the first thing you need to worry about when trying to operate from multiple locations. You can end up with lot of hidden costs and risks on your hands if your inventory is not duly managed.
Inventory management feature in your SCM solution will streamline your inventory. It will send out alerts or notices on certain events like when you reach minimum or maximum inventory levels. You can have auto-email shipment confirmations and receipt confirmations. You can also have web-based centralized visibility to different parts, their description, respective minimum and maximum levels, real-time quantity on hand, total moveable units on hand, buffer stock, etc. You can further have access to information like on-hold products, adjustment history, year to date average product turnover, etc. And if you wish to go to the micro level, then you can store information for every single transaction for every single product.
Global Shipment Management
When enterprises go global with their operations, logistics and shipments become another major concern. Global shipments are often plagued by issues of non-standardized reporting methods. Different countries, ports, carriers, and even suppliers for that matter, follow different reporting methods. Your SCM solution should have a shipment feature powered by XML, GPS, and EDI. This makes it easy to track inbound and outbound international shipments and capture their details and updates. An SCM can simplify your logistics and shipment arrangements.
Global Transportation Management
A good SCM solution should allow you to manage the physical and financial elements of transportation activities of your business. Manufacturing enterprises should be able to view and manage the transportation activities without any limitation of size, mode, or location. They should be able to plan, execute, and manage transportation processes with real-time visibility of shipment tracking.
Supplier Management Portal
The small and medium sized manufacturing units can make do with enterprise systems like ERP system and instead opt for a supplier management portal in their SCM solution. This supplier portal can lend transparency to all the inbound processes right from the issuance of an order by the manufacturer to the order being received. The checkpoints placed in between the processes offer visibility to output of goods and services. The supplier portal mitigates your cost by reducing the internal support requirements and making the entire supply chain transparent.
If you are a manufacturing unit, then you are bound to have units that are returned for different reasons. These units have to be neatly accounted for given that they affect your revenues. So your SCM solution should have a returns management feature to store the details of units returned. This feature should allow you to track the returned unit right from the initial order placement to covering the full circle of quality checks and balances. You should be able to use this feature to track schedules, transportation details, quality inspection phase, repairs, and destruction of returned units. You can also store details of payments returned.
This feature becomes all the more critical when an enterprise deals with a variety of suppliers from all across the globe. Firstly, this feature can display cross-dock receipt of products for review and mitigate the risks associated with non-standardized events. Your checkpoint feature will streamline your supply chain right from point of origin to point of sale of a product. You can keep track of product details across different points in your supply process. The feature offers good visibility and reporting facility for products. In a nutshell, it takes the whirlwind environment of non-standardized data and transforms it into a repository of data that is standardized and usable.
No process is foolproof, not even the supply process. There are bound to be events that are out of ordinary. That is precisely why we call them exceptions. A supply chain has exceptions of products getting damaged during transit, missing paperwork, shipping getting delayed, so on and so forth. Your SCM solution should create a record of all such exceptions and report them. More preferred would be a web-based logging system that is both simple and functional. Secondly, the logging system should ensure that exception events do not create inefficiencies in standard processes. Furthermore, the logging system should offer exception event reports to both internal and external users.
An SCM solution is like a fine thread that runs through your different bead like processes and ties them up together. The stronger your thread is the more streamlined and efficient your processes would be. It’s as simple as that!