The Five Functions of Supply Chain Management

6/27/19 10:30 AM

Supply chain management (SCM) ensures that you maintain the balance between demand and supply and ultimately involves actions from procurement of materials and converting them into finished goods that are then delivered within the timely manner that they are expected. Supply chain management is an absolute necessity for any business and is typically the backbone of most operations.The Five Functions of Supply Chain Management

Supply chain management (SCM) has a need to be efficient in order for operations to be able to reduce waste, cost, increase profit, and ensure for timely deliveries of product. This is why understanding the five functions of supply chain management are incredibly important and will provide thorough insight into how to improve your manufacturing operations efficiency. Therefore, here are the five functions of supply chain management (SCM).

Five Functions of Supply Chain Management

The five functions of supply chain management include the following:

  • Purchasing - Purchasing is the first function of supply chain management and pertains to procuring raw materials and other resources that are essential for the manufacturing of a product or good. It requires coordination with suppliers in order for delivery to arrive without any potential delays.
  • Operations - Within supply chain, the operation team engages in demand planning and forecasting. In order for the team to be able to properly order materials, the company has to anticipate potential market demand and the number of units that will be needed to be produced within a timely manner. This runs over into inventory management, production, and shipping. If you over anticipate demand, then it could easily result in excess inventory cost. If the demand is under anticipated, the organization could be unable to meet consumer demand, which leads to revenue loss
  • Logistics - Logistics pertains to requirement for coordination. The manufacturing of products has commenced, in which it needs space for storage til it shipped for delivery. This will call  for making local warehouse arrangements. Logistics ensures that the products will reach the end-point delivery without any hindrances.
  • Resource Management - Production consumes raw materials, technology, time, and labor. All processes need to be efficient and effective, in which this phase will be taken care of by the resource management function team. It decides the allocation of resources in the accurate activity at the right time to optimize the production at reduced costs.
  • Information Workflow - Information sharing and distribution is what keeps all of the other functions of supply chain management on track. If the information workflow and communication are poor, it could break apart the entire chain.

It is important and essential to understand the five functions of supply chain management (SCM). Advanced Planning and Scheduling (APS) Software can aid with the five functions of supply chain management (SCM) with ease. Advanced Planning and Scheduling (APS) Software can provide thorough insight into your manufacturing operation through visual production scheduling. Advanced Planning and Scheduling (APS) Software is a must for manufacturing operations that are seeking to take their operation to the next level and improve the efficiency of their overall operation. APS is being implemented into manufacturing operations around the globe and will ensure that you will maintain your competitive edge.

Advanced Planning and Scheduling Software

Advanced Planning and Scheduling (APS) software has become a must for modern-day manufacturing operations due to customer demand for increased product mix and fast delivery combined with downward cost pressures. APS can be quickly integrated with a ERP/MRP software to fill gaps where these system lack planning and scheduling flexibility and accuracy. Advanced Planning and Scheduling (APS) helps planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans.

  • Create optimized schedules balancing production efficiency and delivery performance
  • Maximize output on bottleneck resources to increase revenue
  • Synchronize supply with demand to reduce inventories
  • Provide company-wide visibility to capacity
  • Enable scenario data-driven decision making

Implementation of Advanced Planning and Scheduling (APS) software will take your manufacturing operations to the next level of production efficiency, taking advantage of the operational data you already have in your ERP.

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