Supply chain management (SCM) is the process of keeping track of the flow of goods and services. It encompasses every process stage that converts raw materials into finished goods. Moreover, it involves concerted efforts to streamline a business’s supply-side operations to provide customers with the best possible value and give the firm an advantage over its rivals.
Supply chain management is essential because it emphasizes strategic activities that may have a good ripple effect across the whole of the firm. The primary areas in which the practices and processes of the supply chain may impact firm results are customer happiness and return on investment (ROI). Demand management, supply management, sales, operations planning, and product portfolio management are the four primary components of HashMicro’s Supply Chain Management (SCM) process.
Table of Content:
Table of Content
Demand Management
Demand management is divided into three components demand planning, product planning, and trade promotion planning.
- Demand planning is the process of anticipating demand to make sure that supplies will be available when needed. Effective demand planning may raise the accuracy of revenue forecasts, match inventory levels to demand peaks and troughs, and boost a channel’s or product’s profitability.
- Merchandise planning is a systematic approach to organizing, buying, and selling goods to maximize return on investment (ROI) and ensure that goods are available at the places, times, costs, and numbers required by the market.
- Trade promotion planning is a marketing strategy that increases the demand for products at retail establishments, including special pricing, display fixtures, demonstrations, value-added incentives, no-obligation freebies, and other promotions. Moreover, trade promotions help shorten the buying cycle for traditionally sold products in retail environments.
Also read: Tips for Handling Supply Chain Issues with Automated Software
Supply Management
Supply management has five components: supply planning, production planning, inventory planning, capacity planning, and distribution planning.
- The demand plan generates needs, and supply planning decides how to meet them best. The goal is to strike a balance between supply and demand, allowing the organization to meet its financial and service goals.
- Production planning takes into account the manufacturing and production departments of a business. It considers the distribution of labor, resources, and manufacturing capability. Planning for production and supplies includes:
- Collaboration with suppliers
- Scheduling production
- Inventory planning identifies the ideal amount and timing to match it with sales and production requirements.
- Capacity planning calculates the number of production workers and pieces of equipment required to satisfy product demand.
- Distributing products from a supplier or producer to the point of sale is supervised by distribution and network planning. Packaging, inventory, warehousing, supply chain management, and logistics are all included under the umbrella term of distribution management.
Sales and Operation Planning
Sales and operations planning (S&OP) is a monthly integrated business management process that enables leadership to concentrate on important supply chain drivers, including sales, marketing, demand management, manufacturing, inventory management, and the launch of new products.
S&OP’s objective is to empower leaders to make more informed choices by dynamically connecting plans and strategies throughout the organization with an eye on their financial and business effects. S&OP helps a firm manage its supply chain effectively and concentrate on meeting client demands while maintaining profitability.
Product Portfolio Management
Product portfolio management is developing a product concept and bringing it to market. A corporation must have a backup plan when a product’s profit does not gain or sell well.
Management of a product portfolio requires:
- The launch of new products
- End-of-life planning
- Planning for cannibalization, commercialization, and ramp
- Analysis of the Contribution Margin
- Brand, portfolio, and platform planning
- Portfolio management
Also read: Importance of Supply Chain Management in the Modern-Day Business
Conclusion
Supply chain management (SCM) monitors the movement of products and services. The four main elements are product portfolio management, demand management, supply management, sales, operations planning, and supplies management. For the organization to achieve its objectives, supply and demand must be balanced.
Moreover, with sales and operations planning (S&OP), management may concentrate on key supply chain drivers, including sales, marketing, demand management, production, inventory management, and the introduction of new goods. The goal of S&OP is to enable executives to make better decisions by dynamically linking plans and strategies across the enterprise.
Supply Chain Management (SCM) Software allows you to stay up with fast-paced marketplaces with total visibility and powerful analytics. Furthermore, you may plan, source, deliver, and predict the products at the right time. Hash Supply Chain is the way to go if you want our software benefits and features. You may download our software’s pricing structure to discover more about the costs. You may also test the free demo to see how our product can help you.
