What is Supply Chain Management?

In the simplest terms, the Supply Chain is the network of resources and activities needed to take raw materials and components to create a finished product or service  and deliver it to the end user.

In any given organization, there are a number of  trading partners, which typically include:

  • suppliers,
  • distributors,
  • activities,
  • manufacturers,
  • end customers, and/or
  • consumers.

This string of trading partners is known as the Supply Chain.

So, what is Supply Chain Management?

Supply Chain Management is the process of planning, managing, streamlining and continuously improving the supply chain processes to reduce cost and wasted time and effort. SCM requires the close monitoring of all costs needed to create a product and service for end users and analyzing where there is room for improvement. 

When done correctly, Supply Chain Management is a competitive differentiator in every industry in the world.

Table of Contents:

  1. Lean Supply Chain
  2. Supply Chain Risk Management
  3. Supply Chain Operational Excellence (OpEx)
  4. Supply Chain Operations Reference Model (SCOR)
  5. Certified SC Transformation Architect (CSCTA)
  6. Logistics

Lean Supply Chain

Supply Chain Risk Management

Supply Chain Operational Excellence (OpEx)

Supply Chain Operations Reference Model (SCOR)

Certified Supply Chain Transformation Architect (CSCTA)

Lean Supply Chain

Lean Supply Chain Management

Over the past 20+ years, thousands of manufacturing companies have jumped on the “Lean” bandwagon and have seen notable gains. Lean is all about eliminating waste, and removing anything from a process doesn’t add value either to the product itself or to the process. The Lean approach uses a myriad of tools and techniques to help identify and reduce, or in some cases eliminate, waste.

One of the most fundamental of those Lean tools in Supply Chain Management is value stream mapping.

So, how does Six Sigma come into play?

Six Sigma is all about reducing variation and improving first-time quality. Lean Six Sigma provides a structured and statistical method of solving complex problems with a more structured approach to eliminating waste in a supply chain.

Supply Chain Risk Management

Identifying potential risks is an integral piece to the management of the supply chain. Threats to the supply chain can include:

  • Volatility of costs
  • Shortages in materials
  • Failures of suppliers and other resources
  • Natural disasters and other unpredictable supply disruptions.

In order to be prepared for disruptions, you must plan for them. Data analytics plays a critical role in identifying and planning for potential risks.  Keep in mind, Risk Management is not a ‘one and done’ process. As the political climate, environment, and trade continue to evolve and change, the risks which may impact your supply chain are also subject to change. Additionally, if your organization is considering a facility move, management change, or product redesign, new risks will arise.

When identifying risks, it’s important to consider:

  • Reliability,
  • Responsiveness,
  • Agility,
  • Cost, and
  • Asset efficiency.

Once risks have been identified they need to be qualified by level of probability, monitored and mitigated as you and your team see fit.

Supply Chain Operational Excellence (OpEx)

Consider this: 80% of the value in most businesses is generated out of 20% of the resources used. Do you clearly and specifically know which processes these are?

What is Supply Chain Operational Excellence?

Achieving OpEx Leadership involves a number of different processes, competencies, and technologies, in addition to productive teamwork, proactive problem solving, and effective leadership. It’s easier said than done.

In Supply Chain, focusing on customer’s needs, empowering employees and improving processes are paramount to realizing operational excellence leadership.  An organization’s main focus needs to be the customer and meeting their needs in the least costly and most efficient way. Everything begins and ends with the customer.

How can you achieve Leadership in Supply Chain Operational Excellence?

The most common obstacle in achieving OpEx is people. Unlike technology or products, people have a mind of their own, and if they’re not properly engaged, informed, and skilled, your supply chain will suffer.

Performance Monitoring and Improvement

To monitor, empower, and improve the competency of your staff, a number of tools exist, such as:

  • Skills matrixes,
  • Gap analysis,
  • Key Performance Indicators (KPIs), and
  • Focused workforce development programs.

Communications

Effective Communications, or lack thereof, can either make or break any organization’s ability to achieve Operational Excellence.

Logistics

Occasionally, the definitions of Logistics and Supply Chain Management become muddled. In fact, the term Logistics Management is often used to replace the term Supply Chain Management in Europe. In the United States, Logistics is just one of the components of the supply chain puzzle.

What is Logistics?

Every product, and many services, begin with raw materials. These are assembled then transported to a warehouse and/or shipped to the end user, which is either a business or a consumer.  Logistics takes into account planning, transportation of inbound materials, managing inventory, any necessary outsourcing and the management of the fleet of transportation vehicles.

What Is A Third-Party Logistics (3PLs) Firm?

A 3PL acts as an added piece of your business to assist with supply chain efforts. A 3PL offers a business the chance to outsource their logistics to experts in the field. A 3PL assists with:

  • Distribution,
  • Coordination of transport providers,
  • Cross-docking,
  • Storage,
  • And more.

Third-Party Logistics Firms can assist an organization with anything from transportation to warehouse storage to a full supply chain management service.

Supply Chain Operations Reference Model (SCOR)

SCOR, or Supply Chain Operations Reference Model, is a reference framework used to address, improve, and communicate supply chain management decisions within a company and with suppliers and customers of a company (1). SCOR was created as a supply chain improvement methodology and covers all phases of the supply chain process from the entry of the order to the receipt of the product to the end user, as well as the return lifecycle for reuse and disposal.

In the simplest terms: the SCOR model seeks to optimize all the processes needed to satisfy the end user (or customer).

How is SCOR Structured?

The SCOR model is comprised of 4 key sections:

  • Performance
  • Processes
  • Practices
  • People

(1) SCOR Model, Supply Chain Council, October 7, 2004.

Certified Supply Chain Transformation Architect (CSCTA)

The Certified Supply Chain Transformation Architect (CSCTA) Program cultivates the capabilities of executives to deliver end-to-end supply chain performance improvement and transformation.

The CSCTA program focuses on transformational executive leadership utilizing applied learning. The certification provides industry sought after skills for Supply Chain Executives, focusing on:

  • The implementation of best practices
  • Step-by-step processes for accelerated results
  • Real-world examples & simulated decisions

How is the course structured?

The course confronts executives with realistic scenarios and case studies, encouraging them to problem solve and apply their industry knowledge. The unique holistic approach both identifies and develops skills in supply chain leaders. Students not only learn from the course materials, but also from their fellow students. Each executive in attendance contributes their own personal experiences and point of view.  

The course includes:

  • Evaluation and a Customized Learning Plan based on each executive’s needs
  • Applied Learning Sessions
  • Comprehensive Examination
  • Application Interview of Best Practices

Does it work?

“The integrated best practices we learned to apply in the course is a well thought out and reliable way of achieving our business goals. What I liked most about this course is its focus on leadership skills, its high-quality content and delivery, and my ability to apply it immediately with results.”

Mike Kingzett, VP Supply Chain Transformation

“As a 20+ year Supply Chain Professional, I have been through countless Executive courses and supply chain management programs. All of that material and instruction operated in a vacuum without tying it to each other. Then I found the CSCTA. This 8-day course did what no others have done……tie Executive leadership, strategic planning, change management and supply chain management all into one in a language that top-level executives can understand…”

Blake Mathies, SCOR-P, CSCP, CPIM, PMP, LSSGB – Vice President, Supply Chain

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