Effective Supply Chain Management In The Philippines
As a company grows, so does the need for managing the support activities crucial for operations. There are many definitions of supply chain management, but for now, let us simply state that it is the management of goods and supplies from point of origin or purchase, to where it is finally used or consumed.
One would know that poor supply chain management is at play when production or sales stops due to a missing item or part. It is also due to the failure in this aspect that the cost of raw materials and inventory rises to unreasonable levels. Supply chain management overlaps other business functions because it deeply affects virtually all departments.
To get an overview of how supply chain management impacts the company, below are some of its basic components:
Planning the system. Each component of the supply chain is strongly interconnected as implied by the word “chain”. This means that there must be an overall plan for coordinating the components and their inputs and outputs. A mistake in planning may cause such errors as one part of the chain not being compatible with the output from another part.
Purchasing management. Buying the needed supplies and items from outside the company needs careful study. Demand must be forecasted to not only supply the needs, but also to account for variances and emergencies. Specifications must be clearly defined and reliable suppliers must be sought to obtain the items at the lowest cost without sacrificing quality. A comprehensive purchasing policy that is responsive to the company’s needs must be planned beforehand and then periodically reviewed for necessary updates.
Warehouse management. Items not immediately needed must be properly stored. The temperature and humidity of the warehouse is at times important for items like pharmaceuticals. A system should be in place to protect the warehouse from both external and internal theft. Most importantly, a needed item must be easy to retrieve, causing no damage to the storage.
Inventory management. You must learn how to accurately predict the quantity of needed items. The balance between excessive inventory and too little stock is a constant issue in inventory management. Too much inventory ties up capital and increases carrying costs like insurance and obsolescence.
Transportation and materials handling. Frequently, supplies come from faraway places such as other countries. When different ways of transportation are utilized like ships and trucks, this falls under multimodal transport. Find the most economical way of transportation, but make sure the items are handled well and delivered on time. Legal processes regarding transporting your goods in other countries must be known to avoid problems.
Information technology. Only computers have the capacity to handle the large number of variables you need to monitor. Especially in large companies, it is no longer possible for people alone to adequately control the supply chain. There are now plenty of software packages offered for this task. Usually these are expensive programs that need a lot of training to operate, but they are essential for modern supply chain management.
Mastery of supply chain management is one of the key assets of world-class companies. To know more about this topic, BusinessCoach, Inc., a leading business seminar provider, conducts a seminar entitled, “Supply Chain Management.” Contact (02) 727- 5628, (02) 727-8860, (0915) 205-0133 or visit www.businesscoachphil.com for details.
Click here to view details of the seminar: Supply Chain Management»
*Originally published by the Manila Bulletin. C-2, Sunday, November 17, 2013. Written by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) All rights reserved. May not be reproduced or copied without express written permission of the copyright holders.