Active management of supply chain activities aims to maximise customer value and achieve a sustainable competitive advantage. It represents a conscious effort by the supply chain firms to develop and run supply chains in the most effective and efficient ways possible. Supply chain activities cover everything from product development, sourcing, production, and logistics, as well as the information systems needed to coordinate these activities.
Managing the chain primarily therefore concentrates on the management and progression of the following three items:
- Materials / Inventory
- Information
- Funds
Active management of supply chain activities aims to maximise customer value and achieve a sustainable competitive advantage. It represents a conscious effort by the supply chain firms to develop and run supply chains in the most effective and efficient ways possible. Supply chain activities cover everything from product development, sourcing, production, and logistics, as well as the information systems needed to coordinate these activities. Managing the chain primarily therefore concentrates on the management and progression of the following three items:
– Materials/inventory
– Information
– Funds.
Inventory control:
Amongst other things, this will include a consideration of:
– Number, location and size of warehouses and distribution centers
– Production scheduling (including life cycle management to ensure that new products can be successfully integrated into the chain)
– A transportation strategy (in terms of routes, timing etc.)
Information management:
The key elements of information required for successful supply chain management include:
– Potential levels of end-user and customer demand
– Daily production and distribution plans
– Resource availability and utilisation
Fund management:
For the system to work it needs to be sufficiently liquid at all nodes to ensure that bottlenecks are avoided and supply can be sustained. There also needs to be a strong relationship of trust between each party in the chain.
