Business Process of Supply Chain Management

Supply chain management (SCM) is a process of planning, implementing, and controlling the operations of the supply chain with the purpose to satisfy customer requirements as efficiently as possible.

A supply chain is a network of supplier, manufacturing, assembly, distribution, and logistics facilities that perform the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these products to end customers in right time in right manner with right product.

Supply Chain Management

Initially the process starts by getting the market requirement or demand in order make the product ready and supply the same in a regulated way to right customer, at right price, at right place, in right time with optimum budget. Once the product is made ready by using the material and is stored and shipped to inventory storage house which is ready for delivery to customer.

The RFID ID tags (Auto ID infrastructure) get attached to the product which is ready for the delivery, which is basically used for tracking the product movements. RFID tags are electronic chips as explained below will read the product shipment details and feed the new updated data back into the product attached chip (data: ebxml data) and this data is sent to SAP R/3 server database and will be stored/moved later into SAP BW for long time storage.

As the product moves or progresses at each level & gets delivered to the end customer the RFID readers are used in order to track the same. These details are nothing but the ebxml data as said above and stored.

Once the product reaches the end customer the accounts receivable will happen which is nothing but the amount what the OPM had spent in getting the product ready by delivering the same to the end customer. This could include your logistics costs also. This is called as Return on investments (One time ROI) and this usually happens by the end of one Fiscal year once the product reaches the customer. These amounts will be usually in Billion dollars for Enterprise tier one OPM.

In order to manage SCM effectively large scale Enterprise OPM have adopted Auto-ID infrastructure using RFID Tags attached on the product shipments and products case. so the tracking of the product becomes easier and accurate. But unfortunately the same OPMs are neglecting their extended ROI component what they usually get if they can put some effort implementing RSCM and have a good vision on their long term product life cycle.

Some times we call usual supply chain management logistics as Forward Logistics

Comments