For any production company, supply chain management is the department that is responsible for a lot of key functions. Without this body, no product can be produced, from procuring raw materials to processing them and then providing the end product to the consumer.
According to William Schantz of Mid Atlantic Financial, LLC, the easiest way to understand this chain of operation is to take an example of the smallest supply chain. This chain includes the people you take supplies from, then comes your role in manufacturing the product, and then it goes to the customer.
The supply chain can be a bit complex for mega organizations, which are handling multiple suppliers and sometimes using the help of those who are not employees even.
A good supply chain department can manage the balance of the industry and run the operations according to the demand and supply, creating a balance and steady growth rate.
In this post, William Schantz will explain an organization’s key functions of supply chain management.
Three Key Functions of Supply Chain Management By William Schantz
Procurement Of The Raw Materials-Explained By William Schantz
The first and most important step that brings the supply chain into action is purchasing or buying primary goods. Whether working in a pharmaceutical company where you need to get ingredients and chemicals for the medicines or in a shoe-making company where the raw materials are leather, synthetic fibers, and polishes, the supply chain management always performs the purchase and gives it to the production department.
This is an intense job since the team handling this has to coordinate with different companies from where supplies are coming, and then one of the frequent issues of this job is that sometimes the deliveries aren’t on time, so the production gets delayed. Consequently, this triggers the domino effect, and the timeline for the product to reach the market extends.
Forecasting The Demand Of The Product-Explained By William Schantz
Supply chain management’s second role is forecasting the product’s demand in the market; for example, the demand for sweaters will rise in the winter. Hence, the planning to procure wool and threads should be done in the early summers when the raw materials prices are lower rather than waiting till the end of summer. Furthermore, the forecasting of the produced product must be adequate to satisfy the demand.
According to William Schantz, making too much will incur losses, and making too less will not meet customer satisfaction, and the organization will lose clientele.
Management of Resources and Logistics
The third key function, as per William Schantz, is the management of all the jobs being performed in the production department. From keeping the warehouses in check to keeping all the finished goods on transportation track for shipping, everything must be overseen by the supply chain management team.
As per William Schantz, the supply chain is the backbone of any product manufacturing company. An efficiently functioning supply chain has the power to boost sales and profit. Furthermore, creating a loop of information flow is essential to ensure all purchases and sales are in the correct order.