The supply chain is the system by which information, financial resources and products move from the supplier or manufacturer to the end consumer. There may or may not be intermediaries depending on the nature of goods or services involved. Such intermediaries include retailers and wholesalers. Proper management of this chain is needed for the business to realize maximum benefits. The process of getting the most out of it is known as supply chain optimization.
There are various factors that determine how complex a supply chain will turn out. They include the specific type of business, the process that is involved to move the product from the supplier to the target consumer, the size of the market and its geographical location and the type of technology that is used to make all these possible. The tremendous growth in technology has made it easier for all the players to collaborate easily.
Optimization uses various tools and processes to ensure that the operations of the system are as efficient as possible. Such will include, for example, minimization of operation costs such as those related to manufacturing, transportation and distribution. The objective is to deliver products to the end consumers at the lowest possible cost and to generate the highest profit. A number of mathematical modelling techniques that are run by computer software are usually used to achieve this.
The adoption of mobile-based technologies by many of the companies involved in the supply chain has gone a long way into creating efficiency. Areas that have experienced improvements include field sales, product marketing and direct provision of goods and services to consumers. The mobile-based platforms can transmit important information such as product origin, content and manufacturing methodology among others to the prospective consumers.
An important principle in optimization is predetermination of demand. This has to be done as accurately as possible by considering historical demand and predicting future trends. The approach can be used for single items or for aggregated data such as groups of consumers, types of merchandise and so on. With the information obtained, the business can determine the stock levels to be maintained both for products with erratic demand as well as those with stable demand.
Before you undertake the optimization exercise you first need to thoroughly analyze your company to determine its strengths and weaknesses as relates to the supply chain. For the areas that you notice that you have no capacity to handle optimally it is a good idea to outsource the same to more specialized companies. Companies that are specialized in these areas will spend less in achieving desired results than those that are not.
The process of optimizing is often long and quite frustrating. You need to think globally and act locally with regard to how you plan on implementing your strategy. A single decision in one area (such as manufacturing) is likely to affect other areas as well (such as marketing, transportation and distribution). Once a change has been implemented, regular reviews should be undertaken to find out whether progress is taking place.
When a supply chain is optimized, there are a number of advantages that the business will have. Among them is the fact that the operation costs will be minimized and this will increase the profit margin of the organization. Another major advantage is better collaboration among all the players translating into faster inventory clearance.
There are various factors that determine how complex a supply chain will turn out. They include the specific type of business, the process that is involved to move the product from the supplier to the target consumer, the size of the market and its geographical location and the type of technology that is used to make all these possible. The tremendous growth in technology has made it easier for all the players to collaborate easily.
Optimization uses various tools and processes to ensure that the operations of the system are as efficient as possible. Such will include, for example, minimization of operation costs such as those related to manufacturing, transportation and distribution. The objective is to deliver products to the end consumers at the lowest possible cost and to generate the highest profit. A number of mathematical modelling techniques that are run by computer software are usually used to achieve this.
The adoption of mobile-based technologies by many of the companies involved in the supply chain has gone a long way into creating efficiency. Areas that have experienced improvements include field sales, product marketing and direct provision of goods and services to consumers. The mobile-based platforms can transmit important information such as product origin, content and manufacturing methodology among others to the prospective consumers.
An important principle in optimization is predetermination of demand. This has to be done as accurately as possible by considering historical demand and predicting future trends. The approach can be used for single items or for aggregated data such as groups of consumers, types of merchandise and so on. With the information obtained, the business can determine the stock levels to be maintained both for products with erratic demand as well as those with stable demand.
Before you undertake the optimization exercise you first need to thoroughly analyze your company to determine its strengths and weaknesses as relates to the supply chain. For the areas that you notice that you have no capacity to handle optimally it is a good idea to outsource the same to more specialized companies. Companies that are specialized in these areas will spend less in achieving desired results than those that are not.
The process of optimizing is often long and quite frustrating. You need to think globally and act locally with regard to how you plan on implementing your strategy. A single decision in one area (such as manufacturing) is likely to affect other areas as well (such as marketing, transportation and distribution). Once a change has been implemented, regular reviews should be undertaken to find out whether progress is taking place.
When a supply chain is optimized, there are a number of advantages that the business will have. Among them is the fact that the operation costs will be minimized and this will increase the profit margin of the organization. Another major advantage is better collaboration among all the players translating into faster inventory clearance.
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