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Supply Chain Management

Supply Chain Management

A very basic definition of supply chain management (SCM) can be said:

Everything that happens behind the scenes to deliver the product to the customer is supply chain management.

Purchase of raw materials and manufacturing order, transportation, inventory management and many other things are the main part of this cycle. This process begins with market demand monitoring to find out what customers want, when and how much customers demand, and then progresses through all stages from sourcing to production and logistics.

For this incredibly complex cycle to be as efficient as possible, each partner or “link” in this chain must be integrated into a fully coordinated and responsive system.

In 2020, the whole world realized the critical importance of supply chains. When equipment failed to operate or manufacturers were unable to procure essential materials, both companies and consumers realized the value of flexible and scalable supply chains. Companies all over the world are now taking a closer look at their supply chains and the technologies used in them and asking what they can do to stabilize their business.

Why is supply chain management important?

Look around you, basically nothing in your home or office would exist without a supply chain. Hundreds of millions of jobs worldwide are linked to these activities. From cheap consumer goods to surgical equipment and vital resources, everything comes through a supply chain.

Yet despite SCM being at the core of the global economy, many companies still operate their supply chains with the same processes and machinery they have used for 50 years.

Improved SCM practices can transform businesses. Companies can enjoy a higher competitive advantage by minimizing waste and excess consumables, while reducing costs and increasing efficiency. They can increase customer loyalty and make their processes faster, smarter and more productive by providing personalized logistics according to their individual tastes.

Global Supply Chain Management History

In past decades, supply chains have developed to take advantage of the low labor wages and cheaper raw materials found in some countries.

Now, the world has changed in many ways. Trade and tariff policies often change unpredictably, and the future of trade is uncertain. Organizations want to be better informed about the origin and sustainability of their products, from raw materials to packaging and the amount of fuel used by delivery trucks.

Examining effects such as bullwhip effect is also one of the analyzes that can help organizations along the supply chain.

Fortunately, technology has also changed. Modern supply chains are using Big Data across all links in the chain to streamline production, while also developing internal supply chain solutions.

The main components of supply chain management

Supply chain planning

Basically supply chain planning is the process of forecasting product demand and then coordinating all supply chain links to deliver it. In addition to demand forecasting and planning, it also includes supply planning, material requirements planning (MRP), production planning, and sales and operations planning (S&OP). In modern SCM, these programs are usually all connected to a single, integrated business plan (IBP).

Logistics management

Basically logistics management, from the transportation and storage of raw materials and manufactured goods, to the delivery of final products to stores or customers, and even product return and recycling services. Logistics management business functions include inbound and outbound transportation management, fleet management, warehouse management, inventory control, and customer service.

Construction technology

A major manufacturing priority in SCM is to keep production and processes as flexible as possible while maintaining quality (sustainability and customer satisfaction). Artificial intelligence (AI) and systems equipped with the Internet of Things (IoT) in the supply chain can collect and analyze big data to simplify and automate production processes.

Product life cycle management

The process of managing product is called Product Lifecycle Management (PLM).In other words a product throughout, its entire life cycle from ideation, engineering and design, to manufacturing and service and disposal (or recycling). PLM software systems integrate these processes and facilitate enterprise-wide collaboration.

Company asset management

Enterprise asset management is the process of managing and maintaining physical assets throughout the supply chain, from factory robotics to delivery fleets. IoT sensors and machine-to-machine (M2M) connectivity are improving efficiency, improving uptime, improving safety, and improving preventive and predictive maintenance. Some cycle-connected assets can even anticipate repairs or breakdowns and even perform their own maintenance (until the parts needed to extend the life cycle can be procured and ordered).

Logistics

Procurement is the process of obtaining materials, goods, and services to meet business needs, ensuring the quality and value of those goods, and negotiating fair prices. Accurate order volume forecasting is a major challenge for sourcing teams, as shortages and overages can hurt business. SCM systems that incorporate machine learning and predictive analytics can take the guesswork out of your organization’s purchasing.

Advantages of Supply Chain Management

More productivity

Enterprise asset management and predictive maintenance systems help machinery and systems run more efficiently. This can remove bottlenecks, improve circulation and increase productivity. Automated processes and real-time responsive data analysis systems also mean faster shipping and delivery times.

Reducing costs with the supply chain

In fact reducing predictive analytics helps eliminate “cost estimation” that causes wasteful inventory and dangerous shortages. The Internet of Things allows your existing assets to be more responsive and provide you with the most efficient and useful workflow in any situation. It also provides more accurate forecasting to help reduce delivery trucks that are not fully loaded, uncoordinated shipping routes and inefficient fleet management.

Greater agility and flexibility of the supply chain

Market trends and shifts can happen suddenly, so it’s important to be very agile and have flexible SCM systems that have the ability to adapt to any circumstances. Real-time data and intelligent insights can help supply chain managers allocate the necessary machines and staff for better workflows. Customer feedback will be immediately audible and actionable. Virtual inventories and intelligent warehouse processes align supply and demand.

Improved product quality

Direct communication of customer feedback with the R&D team means that product design and development is completely tailored to customer needs. R&D and manufacturing teams can respond to customer trends and demands using machine learning insights and analytics, along with product design improvements.

Better customer service

SCM best practices are customer-centric and designed to meet customer needs. Modern SCM enables companies to implement customer feedback and processes from design and manufacturing to logistics, delivery, and end-to-end performance.

The evolution of supply chain management

For decades, customer involvement in the supply chain was only at the bottom of the cycle. Where the products are produced, what they are made of and how they arrived at the store has not been considered by many customers. Today, the transparency and stability of the supply chain is of vital importance to consumers. Likewise, the ability to fully control the way and place of purchase and the options that are expected to be realized along the way is one of the requirements of this cycle.

To grow and compete in today’s market, a modern SCM must be able to collect and interpret all the data generated and captured throughout the supply chain. To take full advantage of this data, new technologies are needed to transform this data into real-time insights and use them to automate SCM and workflow processes in a completely intelligent and agile way.

Although we can’t predict the future, we can be sure that economic changes, unexpected events, and customer demand are rapidly creating a massive transformation. Using data- and technology-driven SCM systems, we can transform supply chain management and build the new, responsive type of supply chain we need for our businesses in 2021 and beyond.

New supply chain technologies

There are new and emerging technologies that are impacting the digital supply chain transformation. Artificial intelligence and machine learning are now increasingly used in supply chain management, for example now the Internet of Things, cloud computing, autonomous things such as robots and drones, 3D printing, augmented reality (AR), virtual reality (VR), and blockchain. And many such technologies together fuel the fourth industrial revolution and this is where supply chain management grows even more.

Significant Supply Chain Management Trends:

Impact of the Corona virus on supply chains

In 2019, no one could have predicted the wave of chaos and disruption that 2020 will bring to society. We couldn’t know but we certainly could have been better prepared. Businesses around the world received a warning through COVID-19 about how vulnerable and outdated some of their supply chain processes are. Businesses that use artificial intelligence, machine learning, and predictive analytics in their SCM systems can make smarter decisions, adapt quickly to unexpected events, and be more flexible to market trends.

Green supply chains

Incorporating green (environmental) practices into supply chain management can change everything from product design and sourcing materials to production, procurement, delivery, and even what is done at the end of the life of products and equipment. Circular supply chains seek to recycle and reuse items such as plastics and electronic components in discarded products.

Supply chain transparency

In 2021, customers are more aware of the global economy than ever before and are motivated to engage with companies whose supply chain ethics and policies are recognized.

Over the past few years, trade shifts, new tariffs, and trade policies have become highly unpredictable. Companies that once relied almost entirely on overseas suppliers and manufacturers are feeling vulnerable and are looking for safer options nearby, favoring on-demand manufacturing solutions, such as 3D printing, virtual inventory, and in-house manufacturing solutions.

Focus ERP supply chain management (SCM) module:

Supply Chain Management (SCM) has always played a fundamental role in all businesses whose activities include procurement, warehousing and production. FOCUS ERP systems come with an advanced supply chain management module that helps you manage all aspects of purchasing, sales and logistics with ease and efficiency. The SCM module also helps you manage supplier relationships and assess risks through various analytical tools and reporting capabilities. It should be noted that the supply chain management module can be easily combined with financial resources to instantly synchronize data and prevent data duplication.

Some features of the SCM module:

  • Special features for mobile phones and tablets
  • Real-time data updates
  • The possibility of cloud hosting
  • Automation tools that simplify supply chain operations
  • Easy and user-friendly interface
  • Feature-rich graphics that load quickly and are ready to use
  • Ability to integrate with financial, sales, purchasing, inventory and warehouse modules

Supply chain module is designed to facilitate supply chain operations through a set of detailed tools that can be used by semi-professional and novice users due to its user-friendly graphical interface.

The module also enables demand and supply planning, inventory management, data storage and delivery in a very simple manner, facilitates integration into the accounting framework for instant synchronization of accounts receivable and payable, and also controls credit limits based on credit amount or period. ]

With a strong focus on procurement, purchasing, sales and distribution, the comprehensive tools of the supply chain module help you start automating your organization so you can focus more on your business strategies.

Received awards by Focus ERP from prestigious organizations in 2021

Focus ERP supply chain management system modules:

  • Product sales and warehouse module
  • Internal construction management module and self-sufficiency
  • Logistics module (including purchase logistics, sales logistics and container management)
  • Internal purchase management module
  • Foreign purchases management module
  • Warehouse management module
  • Suppliers portal

Supply chain management module’s important points:

Price list

Using the supply chain management module you can specify the purchase and sale prices of different products, create the same or multiple pricing options, enable or disable the price list and customize it if necessary. You can also define prices based on customer, location, date and other aspects and apply filters like quantity, department, currency and unit. This module allows you to specify prices in different foreign currencies and enter multiple price lists into the system with ease.

Invoice management

To process invoices after purchase, you can use the efficient invoice designer tool of the supply chain management module. The tool is capable of processing sales and purchase invoices at the same time, and also allows you to manage total purchases by vendor or sales by customer, and adjust amounts when receiving or discounting. Also the tool updates the VAT and Tax accounts module along with the relevant reports as soon as the invoice is saved.

Purchase management module features:

Through Focus ERP’s dynamic supply chain management module, you can expertly manage all areas of purchasing through workflow and planning for purchase orders, shipments, and integration with financial resources. Tracking and controlling the credit of the seller with limits and time frame, evaluating prices based on departments, products and sellers, while simplifying order entries, are other features of this system.

Sales management module features:

The logistics and supply chain management module is equipped with advanced sales management tools that cover all activities, from price inquiry and sales to delivery. The supply chain management module enables you to automate, with customizations, define and control customer credit, generate sales forecasts, and analyze sales trends and extensive profitability. Other features of this system include reservation for sales orders and clarity of accounts receivable left by the customer.

Purchase management module features:

The purchase management module in Focus ERP is a powerful solution to ensure the accurate purchase process from the approved supplier according to the defined quantities, price and conditions with the guarantee of maintaining organizational interests.

The process flow definition module allows you to create multiple processes for the supply of goods, spot purchases, local and other types from the time of purchase request to the time of supplier invoice.

Authorization management allows you to control approvals related to purchase inquiries and orders according to the hierarchical structure.

The price list provides the possibility of simplifying and accelerating the entry of information and updating purchase prices according to various parameters such as supplier, location, unit, etc.

The possibility of managing orders through the management of “supplier contracts” to guarantee a healthy process, without defects and taking into account specific conditions and agreements and preconditions.

Inventory management module features:

Managing inventory based on various parameters such as requirements, type of inventory, use cases and scenarios, etc. can be a daunting task, but in Focus ERP supply chain it can become a comfortable task by using its capabilities.

  • Inventory management using various parameters such as unit of measurement, order point, batch, position, RMA, supplier, shelf, brand, attributes (tags), quality control, reservation status, etc.
  • Creating different costing methods such as FIFO, LIFO, standard and weighted average
  • Execution of various reports based on scenarios such as real warehouse and virtual warehouse, including purchase requests, warehouse and reservations
  • Inventory management based on shelf, attributes and capacity considering the layout strategy defined by the user

Property management module features:

In fact the property management module allows you to have a very detailed control and monitoring of the existing and incoming property to the organization, reducing time and increasing productivity.

  • The possibility of managing the physical warehouse through integrated hardware periodically for the warehouse adjustment process
  • Continuous improvement of the organization in terms of financial management
  • The possibility of dashboard integration (order point and warnings needed to inform the user in time when the inventory is low)
  • Empowering the organization in terms of risk control and management
  • The possibility of planning purchases based on purchase requests, forecasts, etc.
  • Integration of financial matters in all process departments
  • The possibility of generating and printing barcodes through the barcode generation tool
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