Basic Tips on Supply Chain Management

six sigmaIt never hurts to brush up on the essentials. If you want to refresh yourself on some of the basics, then consult an article at Six Sigma Online that outlines five stages to supply chain management:

  1. Planning process
  2. Choosing suppliers of raw materials
  3. Manufacturing
  4. Delivery
  5. Return

The first stage is where you plan to manage all the resources needed for product or service delivery. Metrics are developed to measure how efficiently resources are being used, and this all has the end benefit of creating the best, fastest experience for customers. Choosing the right suppliers of raw materials means devising a viable process for pricing, delivery, and payment, and once that is accomplished, the manager is responsible for putting together an inventory for shipment and transportation to the manufacturing facilities. The manufacturing step is where the magic starts to happen. Worker productivity, level of quality, and product output are all monitored at this point as the manager schedules activities involving the delivery of goods and services to the company. In the delivery phase that follows, order receipts from customers are coordinated and an invoicing system is built to bill customers. Then finally come returns, in which defective and excess products delivered to customers are accounted. On the effectiveness of these stages, Six Sigma has this to say: One may ask what impact these processes have on any particular business. Benefits and advantages are many as they are varied; the most obvious being the cost reduction aspect an effective process brings to any business. With reduced cost, there is of course, increased profitability. Other benefits include increased efficiency, and less waste of resources like time and raw materials. Just like you cannot be a good lead guitarist if you are lousy at playing rhythm, you cannot manage the more sophisticated elements of a supply chain if you do not internalize the fundamentals. Review the five stages of supply chain management with Six Sigma to bolster your understanding of your business.

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