Decision Phases Of Supply Chain Management

The many stages involved in supply chain management for taking an action or making a decision connected to a product or service are known as decision phases.

The three primary decision phases of supply chain management are:

  1. Supply chain design (Strategy)
  2. Supply chain management decision (Planning)
  3. Operational level (Operation)

The many stages involved in supply chain management for taking an action or making a decision connected to a product or service are known as decision phases.

Three decision phases are required for successful supply chain management: information flow, product flow, and fund flow.

The three primary decision steps involved in the entire supply chain process will be discussed below. The following are the three phases:

Supply Chain Strategy:

During this period, management makes the majority of the decisions. The decision to be taken takes into account areas such as long-term forecasting and the cost of goods, which can be highly costly if things go wrong. At this point, it’s critical to research market conditions.

These selections are based on the current and future market conditions.

They make up the supply chain’s structural layout. The tasks and responsibilities of each are put out after the layout is completed.

The higher authority or senior management is in charge of all strategic choices. Manufacturing the material, factory site (which should be easy for transporters to load material and dispatch at their specified destination), warehouse location (for storage of completed product or products), and many other considerations are among them.

The first stage of supply chain management is supply chain strategy, during which management chooses the overarching framework for the supply chain. Establishing a thorough plan to achieve the organization’s goals and objectives is the goal of this phase. This phase’s main emphasis is on long-term forecasting and the cost of goods, which could become quite expensive if something goes wrong. As a result, the choices taken at this phase have a big impact on the entire supply chain, and mistakes here could cost the company a lot of money.

Investigating market circumstances is the first stage in supply chain strategy. Data on the market, consumers, rivals, and trends must be gathered and analysed in order to do this. On the basis of this information, management decides how the supply chain will be organised, including the quantity of suppliers, the locations of plants and warehouses, the mode of transportation, and the distribution channels. The objective is to optimise the supply chain to accommodate the demands of the present and foreseeable markets.

The roles and responsibilities of each are assigned once the structural arrangement of the supply chain has been established. Choosing the function of each party in the supply chain, such as suppliers, manufacturers, distributors, and retailers, is part of this process. The higher authority or senior management is in charge of all strategic decisions, and they choose where to manufacture the material, where to build the factory (so that it is simple for transporters to load the material and deliver it to the desired location), where to build the warehouse (so that the finished product or products can be stored there), and many other factors.

Many hours of planning and research must be put into the supply chain strategy phase. To guarantee that the supply chain is successful, it is crucial to take into account all potential outcomes and circumstances. In order for the organisation to fulfil its long-term goals and objectives, a clear and efficient supply chain structure must be established during this phase.

Supply Chain Planning:

Demand and supply should be considered when planning the supply chain.A market study should be conducted in order to comprehend customer demands.The second factor to evaluate is public knowledge and current information about the situation competition and the techniques they employ to meet customer demands requirements. Distinct markets have different demands, as we all know be approached in a different way.

This phase covers everything, from forecasting market demand to determining which market will receive final goods to determining which factory will be built in this stage. All firm participants or workers should make every effort to make the entire procedure as adaptable as possible. If a supply chain design phase works well in short-term planning, it is deemed successful.

Supply chain planning is the second stage of supply chain management. This stage attempts to effectively manage the movement of goods and data along the supply chain. It comprises deciding on supply and demand, predicting market demand, and choosing the market that will purchase the finished items. Because it establishes the framework for the supply chain’s operational level, the supply chain planning step is crucial.

In order to organise the supply chain, it is necessary to comprehend client demand. In order to understand customer demands, a market analysis should be carried out. The general public’s awareness of the situation, the competition, and the strategies they use to satisfy customer expectations are the second component to be considered. distinct markets must be treated differently since, as we all know, they have distinct demands. Forecasting the demand for the products comes next after understanding client desire.

Demand forecasting is a crucial component of supply chain planning. To make sure that the supply chain can fulfil the demand for the product, accurate forecasting is crucial. Based on historical data, market trends, and other elements that can affect demand, the forecast should be made. The next stage is to determine the supply requirements after the demand has been predicted. Making choices here will affect how much manufacturing capacity, how much inventory is needed, and how much transportation is needed.

Choosing the mode of transportation is the next step after determining the demand and supply requirements. This entails deciding on the product’s transportation mode that is both economical and effective. Making decisions on the location of warehouses, distribution centres, and other facilities is part of the supply chain planning phase. The objective is to meet customer demand while maximising the flow of goods through the supply chain and lowering expenses.

Overall, the planning stage of the supply chain is essential to its success. It establishes the framework for the supply chain’s operational level and guarantees that the company can meet consumer demand while lowering costs and boosting efficiency.

Supply Chain Operations:

The third and final decision phase entails making a variety of functional decisions in a matter of minutes, hours, or days. The goal of this decision-making step is to reduce ambiguity and improve performance. This phase includes everything from taking the customer’s order to delivering the product to the consumer.

Consider a consumer who requests a product that your company produces. The marketing department is initially in charge of receiving orders and forwarding them to the production and inventory departments. The manufacturing department subsequently reacts to the client’s request by delivering the requested item to the warehouse via a proper media, where it is distributed to the consumer within a reasonable time limit. All of the departments involved in this process must work together to improve performance and reduce uncertainty.

The ultimate decision-making stage in supply chain management is the supply chain operations phase. Daily functional decisions are made in this phase with the intention of removing ambiguity and enhancing performance. From taking the customer’s purchase through delivering the product to the customer, everything falls under this phase. The supply chain operations phase, as well as its various components and the significance of each component, will be explained in more detail in this section.

A crucial step in the supply chain management process is the supply chain operations phase. It entails carrying out the supply chain strategy and planning phases, during which all the decisions taken are implemented. The management of the physical flow of goods, the flow of information, and the flow of funds is the main goal of this phase. The implementation of all planning and strategy occurs during this crucial period. Every organisation must make sure they do it correctly as a result.

There are various distinct facets to the supply chain management process’ operations phase. Customer service management is the first component. Managing customer orders, monitoring their progression, and guaranteeing prompt delivery are all part of this element. This feature’s objective is to guarantee that clients receive their products promptly and undamaged. Customer loyalty is key for any organization’s long-term success, which is why customer service management is so important.

Demand management is the second component of the operations phase. This component entails controlling the demand for the organization’s available goods and services. Demand management is to make sure that the company generates the ideal number of goods or services to satisfy consumer demand. Demand management is essential since it aids in preventing overproduction or underproduction of commodities, which can result in major losses for the company.

Inventory management is the third component of the operations phase. Managing the organization’s inventory levels is part of this element. Inventory management seeks to balance keeping just enough stock on hand to meet consumer demand with keeping inventory holding expenses to a minimum. Because it helps to avoid stockouts or excess inventory, which can result in missed sales or increased inventory holding expenses, inventory management is important.

The management of logistics is the fourth component of the operations phase. Managing the physical movement of goods from the company to the client is part of this component. Making ensuring that the goods are delivered to the consumer on time and in good shape is the aim of logistics management. Because it contributes to lower transportation costs, lessens product damage, and ensures prompt delivery, logistics management is crucial.

Quality management is the sixth part of the operations phase. This component entails controlling the organization’s ability to provide high-quality goods and services. Assuring that the goods or services fulfil the organization’s quality standards is the aim of quality management. In order to increase customer loyalty, decrease product returns, and enhance an organization’s reputation generally, quality management is essential.

The management of suppliers is the last component of the operations phase. This part entails overseeing the suppliers that give the company the components or raw materials it needs to generate its goods or services. The aim of supplier management is to guarantee that the business has a trustworthy source for raw materials or components that are affordable and in good shape. In order to ensure that the business can manufacture its goods and services affordably and at a high standard, supplier management is essential.

In conclusion, supply chain management’s supply chain operations phase is where all final decisions are made. It entails carrying out the supply chain strategy and planning phases, during which all the decisions taken are implemented. Because all of the planning and strategy are implemented during the operations phase, it is essential. Every organisation must make sure they do it correctly as a result. Customer service management, demand management, inventory management, logistics management, quality management, and supplier management are some of the several facets of the operations phase.

Shubhajna Rai
Shubhajna Rai

A Civil Engineering Graduate interested to share valuable information with the aspirants.

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