Supply chain Umbrella: a large set of
activities beside Purchasing comes under the perview of Supply
chain Umbrella. Each of these seemingly diverse
activities has one important feature in common—it is part of a
network that will define how efficiently and effectively goods and
information flow across a supply chain. Although, the need to
perform supply chain activities has been present for many years. It
is an organization’s willingness to align, coordinate, integrate,
and synchronize these activities and flows that is relatively
new.
These are the following elements of supply chain
umbrella as given below:
- Materials or inventory control: The materials control group is
often responsible for determining the appropriate quantity to order
based on projected demand and then managing materials releases to
suppliers. This includes generating the materials release,
contacting a supplier directly concerning changes, and monitoring
the status of inbound shipments.
Inventory control is responsible for determinig the invetory
level of finished goods required to support customer requirement,
Which emphasizes the physical distribution(outbound or downstream)
side of the supply chain. Integrated supply chain requires material
and inventory control group cordinate thier effort to ensure smooth
flow to customer.
- Shipping: This activity involves physically
getting a product ready for distribution to the customer. This
requires packing to prevent damage, completing any special labeling
requirements, completing the required shipping documents, and/or
arranging transportation with an approved carrier. For obvious
reasons, shipping and outbound transportation must work together
closely.
- Inbound Transportation: Larger organizations
usually have a specialized traffic and transportation function to
manage the physical and informational links between the supplier
and the buyer. For some organizations, transportation is the single
largest category of single costs, especially for highly diversified
organizations. Although a firm may have minimal common purchase
requirements among its operating units, there usually are
opportunities to coordinate the purchase of transportation
services.
- Demand and supply planning: demand planning
identifies all the claims(demand) on output. This includes
forecasts of anticipated demand, inventory adjustments, orders
taken but not filled, and spare-part and aftermarket requirements.
Supply planning is the process of taking demand data and developing
a supply, production, and logistics network capable of satisfying
demand requirements.
This given element is not the part of Supply chain
Umbrella:
- Cash Flow Management: is part of Accouting not
Supply chain. Cash flow management refers to the process by which
an organization maintains control over the inflow and outflow of
funds. The fundamental goal of cash flow management is to ensure
that the incoming flow of funds is always greater than the outgoing
so that the business sits on a surplus. Cash flow management also
serves the ancillary function of ensuring the surplus funds are
invested or held wisely to reap optimum returns on capital
blocked.