Question

2.Describe at a high level how each supply chain driver uses information.

Answer 1

The drivers of the supply chain performance are:

1. Inventory: The management of inventory is the most important of all. It is the responsibility of the company’s supply chain department to keep management of raw materials and finished goods. The decisions of cycling of inventory, safety of inventory and seasonal inventory (excess management/not) is done by this department.
2. Transportation: From the word itself, it can be understood that this means moving the product from one place to another. Transporting the goods to the required location of delivery. This includes the various mode of transportation such as ship, rail, trucks, planes or electronic transport which is the fastest mode.
3. Facilities: This is the warehouse where the goods/product is stored, assembled and fabricated. The operations part is being done here where the various processes of storing the product properly, assembling all the products and its parts and fabricating if required is done.
4. Sourcing: This includes the source and process used to purchase the goods and services. The decision making here to be done is which task is to be internally within the organisation and which needs to be outsourced to Third Party Company.
5. Pricing: This is the most important part of an organisation, where the organisation decides the price of the finished good to be sold off. This affects the behaviour of the buyer thus affecting the supply chain performance.
6. Information: This is the most important part of all the drivers. Without this driver the whole process is not possible. It acts as a connection between various stages of a supply chain. It allows them to coordinate and maximize the profit of the overall supply chain.

Information is used as a coordinating activity related to functioning of other supply chain drivers such as facility, transportation, inventory management, sourcing.

Planning and forecasting of the future demands and to meet them is done here. The available information is used to understand and meet the future demands.

Deploying the correct technology and upgrading the present technology to analyse the information in the supply chain. The correct and optimal usage of the technologies must be understood by the supply chain management.

The company’s supply chain management need to create a balance between the responsiveness and the efficiency that are being achieved.