Supply Chain Management Explained-A Three Step Process

Posted on: April 12, 2017

Supply chain management is a vague and confusing term for most people.  It is a large field with many job opportunities and exciting careers.  Supply chain management spans from sourcing the product all the way to customer support after the purchase.  Here is an easy to understand review of the processes around setting up and optimizing the supply chain.  There are basically three activities that take place in the supply chain.

  1. Plan-This is one of the most crucial elements of the supply chain and also one of the most difficult to grasp. Modern supply chains rely on big data management as the different combinations considering all variables is almost endless. The first step is to hire a great data management person to gather and manage all the details about the suppliers, customers, origins, destinations, weights, dimension, shipping or receiving capabilities, etc. so you have an electronic picture of the variables.  Next this data is fed into an optimization program run by skilled users to come up with the best plan based on the variables and desired outcomes, usually trading off cost vs. service.
  2. Procure- Once the plan is established it is put out to market in a competitive bid to generate the lowest cost to execute the optimal plan. On-line bidding and bundling software is used so providers can offer the best price based on their network.
  3. Execute- Now you have the optimal plan at the lowest price, it’s time to start the engine on the supply chain and get it operational. Most transportation, warehousing, and cross dock providers have sophisticated track and trace and management systems to make sure the products are moving according to plan or make adjustments if not.  There needs to be a careful evaluation here of providers because the cheapest price is not always the best deal.

At a high level this is Supply Chain Management explained simply.  The Cincinnati State Supply Chain Career Center in West Chester exists today because of the needs in this region to have a skilled workforce that can work in the above fields.

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