Level of activities in SCM


Supply chain activities can be grouped into strategic, tactical, and operational levels of activities.

Strategic

  • Strategic network optimization, including the number, location, and size of warehouses, distribution centers and facilities.
  • Strategic partnership with suppliers, distributors, and customers, creating communication channels for critical information and operational improvements such as cross docking, direct shipping, and third-party logistics.
  • Product design coordination, so that new and existing products can be optimally integrated into the supply chain, load management
  • Information Technology infrastructure, to support supply chain operations.
  • Where to make and what to make or buy decisions
  • Align Overall Organizational Strategy with supply strategy

Tactical

  • Sourcing contracts and other purchasing decisions.
  • Production decisions, including contracting, locations, scheduling, and planning process definition.
  • Inventory decisions, including quantity, location, and quality of inventory.
  • Transportation strategy, including frequency, routes, and contracting.
  • Benchmarking of all operations against competitors and implementation of best practices throughout the enterprise.
  • Milestone Payments

Operational

  • Daily production and distribution planning, including all nodes in the supply chain.
  • Production scheduling for each manufacturing facility in the supply chain (minute by minute).
  • Demand planning and forecasting, coordinating the demand forecast of all customers and sharing the forecast with all suppliers.
  • Sourcing planning, including current inventory and forecast demand, in collaboration with all suppliers.
  • Inbound operations, including transportation from suppliers and receiving inventory.
  • Production operations, including the consumption of materials and flow of finished goods.
  • Outbound operations, including all fulfillment activities and transportation to customers.
  • Order promising, accounting for all constraints in the supply chain, including all suppliers, manufacturing facilities. distribution centers, and other customers.
  • Performance tracking of all activities.
·         Organizations increasingly find that they must rely on effective supply chains, or networks, to successfully compete in the global market and networked economy. During the past decades, globalization, outsourcing and information technologyhave enabled many organizations such as Dell and Hewlett Packard, to successfully operate solid collaborative supply networks in which each specialized business partner focuses on only a few key strategic activities. This inter-organizational supply network can be acknowledged as a new form of organization. From a system's point of view, a complex network structure can be decomposed into individual component firms. Traditionally, companies in a supply network concentrate on the inputs and outputs of the processes, with little concern for the internal management working of other individual players.

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