Although it may often feel like your efforts go unrecognized, supply chain management is the essential backbone of the manufacturing sector. If you’re new to the game then it’s important to understand that when the supply chain management processes run smoothly, it can make inventory management so much easier, minimize waste, and give the company access to capital that would have been tied up in stocks, which is why it’s important to get every step of the supply chain process just right.
What are the 8 supply chain processes?
We’ve covered all the individual parts that make up the intricate whole, here are the 8 key supply chain management processes, and the vital part each one plays in the bigger picture.
1. Customer Relationship Management
The first process to be aware of is customer relationship management, which is all about creating and maintaining a strong relationship with your customer base. We all love feeling special, so understandably, when customers get offered tailored products and services, this can give a major boost to customer loyalty, which is what any company wants.
Each customer or customer group should get classified by the value they offer over time. The teams will need to create Product and Service Agreements (PSA), while also working with key customers to refine processes, minimize demand variability and unnecessary activities that add little value. Performance reports are needed in order to rate how profitable each customer is, as well as the financial impact on the customer.
2. Customer Service Management
This is essentially the company’s face to the customer. It ensures that you can find customer information, such as product availability, shipping dates, and order statuses all in one place, making the management of the PSA possible.
3. Supplier Relationship Management
Supplier relationship management is all about how the company engages with its suppliers. Much as in the case of a company’s customer relationships, some suppliers will naturally receive more love than others. You’ll need to ensure that the correct Product and Service Agreements (PSA) are in place and that they’re effectively managed so that all parties get the most out of the trading arrangements.
4. Demand Management
Demand management is the age-old process of balancing supply and demand. Companies need to ensure they’re able to meet the demand for products or services, so some forecasting is necessary to boost flexibility while minimizing demand variability. Customer intelligence, historical sales information, as well as planned marketing efforts will need to be taken into consideration in order to anticipate demand.
5. Order Fulfillment
Order fulfillment is of course exactly that, to meet customer requirements, but it’s so much more than simply filling orders. It encompasses all tasks needed to fulfill those orders, but also the development of the process needed to do that, while also keeping costs as low as possible. Ideal order fulfillment requires one smooth process from supplier, to company, and ultimately to the customer.
6. Manufacturing Flow Management
The manufacturing flow process is concerned with the actual making of the products and the manufacturing flexibility needed to meet the needs of target markets. Manufacturing flexibility’s goal is to answer the question, “How do we create a broad selection of products at an acceptable rate, at the lowest cost possible?” Now that’s something to chew on! And in order to get this right, strategy and execution need to include the whole supply chain.
7. Product Development & Commercialization
Developing new products and effectively getting them out to the marketplace is essential for any company. Customers and suppliers need to be integrated into the product development process. The team will be required to identify the various customer needs; choose the correct materials and the suppliers thereof; as well as to develop production technology (in the manufacturing flow management process), so that the company’s supply chain flow is in tip-top shape!
8. Returns Management
Having customers who wish to return products is inevitable, so of course, there’s a process for that! This process often gets neglected, but it’s important because it concerns everything from product returns, reverse logistics, gatekeeping, and avoidance. Having this efficient process in place could help a company to minimize returns, and even make the most out of items that are reusable.
Become the best supply chain manager you can be!
It should come as no surprise that it may take a very long time before you feel that you’re at the top of your game, so it’s a good idea to brush up on your knowledge in any way that you can. Consider taking a supply chain management short course online. Never stop learning! And remember to put your knowledge into action.