Managing A Supply Chain Can Be As Simple As It Sounds

In today's difficult financial environment, companies have to look very carefully at all aspects of logistics in order to keep out of the red. More than ever attention to supply chain management is a factor that has to be especially prioritized.

Supply chain management, as it is defined, applies to organizing a networked chain of interconnected businesses or branches within a very large conglomerate. Whatever their definition, these satellites exist to provide either products or services. Supply chain management covers finished goods from the point where and when they originated in their final condition and up to and after they are sold for consumption. Supply chain management also spans the various and many aspects involved in the movement and storage of raw materials before and during production as well controlling the movement of work in progress, within a manufacturing environment.

This involves defining the levels of service levels at which a distribution company defines its level of logistical organization to be at its most cost effective. Despite the existing problems in our global economy, the supply chain theorem is still evolving. This means that a company may be required to develop a series of logistics strategies pertaining to production schedules, international distribution or catering to the specific needs of a high volume client or clients.

In today's volatile economy, the demands on a supply chain may be liable to fluctuate from day to day, and the entire logistics of a company will need to be adjusted to meet it. The flexibility of the supply chain takes priority, and companies who want to keep their production lines flowing need to design and implement a formal logistics strategy to be ready to cope with any situation, allowing them to analyze and be prepared for the impact of imminent changes. They also need to be prepared to make any necessary changes to ensure that their general levels of customer service are not negatively affected by a sudden surge of "one off" business.

Logistics organization is assessed at varying levels with each of these levels capable of producing considerable savings in overheads if handled correctly.

The levels that are vital in the supply chain are as follows:

• Market Awareness: Know what your competitors are capable of producing, in which time scale and at what cost.
• Production Levels: Know what your accurate production facilities are at any time, your current production commitments, in which time scale and at what cost.
• Outsourcing: Knowing the extent of how outsourcing will affect both your production and supply chain management facility.
• Transportation: Does your company's existing transportation facility strategies meet desired service levels?

Maintaining a successfully implemented supply chain management strategy is of vital importance for companies, dedicated to maintaining production levels whilst maintaining service levels in today's fluctuating market.