Goals of A Supply Chain

goals of a supply chain
Supply chain management is an important business activity for any company that sells
products. From a simple one-man Amazon business to a multinational corporation selling
millions of units yearly, supply chain management is an absolute necessity to making
sure that both the financial model and the distribution model are as good as they can be.
Ultimately, the supply chain exists to guide the creation of product to meet consumer
demand. It starts from the raw material all the way to the finished good in the consumer’s
hands.
Supply chain management refers to the process of making sure that goods are able to be
placed in the consumer’s hands, when they need it, and at the price that makes sense for
the business. Companies that neglect supply chain management do themselves a great
disservice.
GOALS FOR SUPPLY CHAIN MANAGEMENT

Their key goals for supply chain management should be to achieve efficient fulfillment of
demand, drive outstanding customer value, enhance organizational responsiveness, build
network resiliency, and facilitate financial success.
Improving Efficiency
Efficiency refers to the minimization of waste. Waste can exist in terms of wasted
materials, wasted money, wasted man hours, wasted delivery time, and much more.
Making sure that waste is at a minimum is a key component of supply chain
management.
By managing production, inventory, transportation and logistics, supply chain
management aims to look for opportunities to change procedures in order to cut down on
waste. For example, by sharing inventory data with your supplier, and keeping it updated
in real time using ERP software, the business can replenish inventory quickly to keep up
with customer demand.
Improving Quality
Reducing waste isn’t the only goal of supply chain management. Making sure that the
product and the customer experience are as positive and as effective as they can be is
another significant goal.
For example, if retailers are able to communicate feedback from the customer to your
company about your product’s experience, you’ll be able to know what things you can
change in order to improve it. Or, if there’s an issue with a supplier for a specific part that
a customer has discovered, you can address that issue with customer feedback and relay
those changes back to that supplier or switch suppliers.
Improving Stability
Supply chain management is also about improving and maintaining overall stability of
the supply chain. Companies can aim to forge and maintain strong relationships with their
suppliers and distributors to make sure that business continues to run smoothly.
There are other aspects to stability, mainly with risk management. By keeping an eye on
possible risks associated with parts of the supply chain, a business can take steps to
alleviate the risk.
impact of supply chain decisions on the success of a firm.
The supply chain is important to success because the positive or negative effects resound
throughout the business.
When the supply chain meets or exceeds the expectations of the customer, it's because of
efficiencies. The entire business benefits through higher order rates, a positive sentiment
in the customer's mind, and lower cost-to-serve for the business.
These decisions and their impact can vary for a wide variety of reasons. For instance,
consider the difference in the supply chain structure for fast-moving consumer goods
Supply chain decisions have a large impact on the success or failure of each firm because
they significantly influence both the revenue generated and the cost incurred. Successful
supply chains manage flows of product, information, and funds to provide a high level
of product availability to the customer while keeping costs low.
Supply chain decisions may be characterized as strategic (design), planning, or

operational, depending on the time period during which they apply. Strategic decisions
relate to supply chain configuration. These decisions have a long-term impact lasting
several years.
Planning decisions cover a period of a few months to a year and include decisions such as
production plans, subcontracting, and promotions over that period. Operational decisions
span from minutes to days and include sequencing production and filling specific orders.
Strategic decisions define the constraints for planning decisions, and planning decisions
define the constraints for operational decisions.
In supply chain management, all parties are directly or indirectly involved with each
other to fulfill the demand of consumers. It does not include only the manufacturers and
suppliers but also agents, brokers, retailers, wholesalers and customers themselves. In
organizations, the supply chain involves receiving and fulfilling customer demand. It may
be new product development, marketing .operations, distribution, finance, and customer
service.
For Example
the supply chain of Wal-Mart and Amazon. It will give you a clear scene of the
importance of supply chain decisions. They are the most successful companies in the
world. Because they are successful to manage their supply chain decisions most
effectively. They have built their success on superior design, planning, and operation of
the supply chain.
In contrast, the failure of many businesses must depend on effective supply chain
decisions. The weak supply chain decisions can’t bring success for the organizations.
Sometimes, we can see that, some companies supply chain can’t adopt them to the
changing nature of the supply chain. Moreover, they also fail to meet customer
expectations.
the push/pull views of a supply chain with example.
Supply chains are planned based on when a product is produced, delivered to distribution
centers and made available at retail stores. The most common strategies for moving from
upstream to downstream sites are push and pull strategies, or some mix of both. A pull
strategy is when customer demand drives the entire production process. On the other
hand, a push strategy is when production is based on long term customer forecasts.
All processes in a supply chain fall into one of two categories depending on the timing of
their execution relative to end customer demand. With pull processes, execution is
initiated in response to a customer order. With push processes, execution is initiated in
anticipation of customer orders based on a forecast. Pull processes may also be referred
to as reactive processes because they react to customer demand. Push processes may also
be referred to as speculative processes because they respond to speculated (or forecasted)
rather than actual demand.
Push processes operate in an uncertain environment because customer demand is not yet
known. Pull processes operate in an environment in which customer demand is known.
Example
Amazon is one of the biggest online retailers in the world right now that manages around
billions of dollars worth of inventory each year. Push and Pull logistics are a big part of
their inventory management. Amazon’s warehouses are strategically placed, moving
closer and closer to main metropolitan areas and city centers. As a result, it uses a pure
push strategy for the products it stores in its warehouses because it is based on the
downstream demand forecast. On the other hand, it uses a pure pull strategy when it sells
the products from third-party sellers to minimize its own risk for unsold inventory.

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goals of a supply chain

GOALS FOR SUPPLY CHAIN MANAGEMENT

impact of supply chain decisions on the success of a firm.

Supply chain decisions may be characterized as strategic (design), planning, or

the push/pull views of a supply chain with example.

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