Question

To assess your understanding for E- Supply Chain / E- Logistic Management.

Q. How the supply chain design helps to manage the constraints and margins?

(250 words)
No Plagiarism (copying) please.

Answer 1

A well-designed supply chain can reduce cost, increase revenue, delight customers and provide a competitive edge to a company in a moving market. Constraints and margins are usually the costs and the excess money earned on selling a product to the end customer. A supply chain is designed to cut the costs in a rational way so that the margins are increased by selling the same number of products to the end customers. There are basically two types of product margins: High margin products and low margin products. Hence, supply chain is basically designed to manage it in two ways: 1. The desire of the company to serve more high profit products to the customers and 2. The ability of the company to stop serving the customers with products of low profit yields. These are the two major ways in which supply chain is designed to manage the margins.

Constraints are the costs which the company incurs in supplying a product to the end consumer. There might be many costs involved in it such as supplies, costs of shipping, storing and retrieving them in a supply chain. A supply chain is designed in such a way that these costs are optimized and the impact on profits is reduced. The different ways to do so are Improving the utilization of space in keeping the inventory at a warehouse, using multiple suppliers to procure the raw materials so that we recieve the high quality products at low costs and no delays, just in time inventory if the raw materials as the early arrival costs in warehouse and late arrival costs in business, reviw of customer demand patterns by integrating the supply chain horizontally and vertically, optimizing the ordering process by removing the waste activities in the process.

These ideas of designing a supply chain helps in maintaining the margins and constraints in a supply chain.