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Objective of A Supply Chain

The main objectives of supply chain management are to reduce uncertainty, reduce lead times, and eliminate non-value added activities. Specifically, it aims to reduce supply, process, and demand uncertainty by identifying reliable vendors, adopting effective maintenance practices and technology, and using good forecasting techniques. It also seeks to minimize the time required for procurement, conversion, and distribution through fast transportation, efficient planning, and innovative processes. Additionally, supply chain management looks to eliminate undesirable or non-value added activities through business process reengineering to simplify the entire supply chain.

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68 views

Objective of A Supply Chain

The main objectives of supply chain management are to reduce uncertainty, reduce lead times, and eliminate non-value added activities. Specifically, it aims to reduce supply, process, and demand uncertainty by identifying reliable vendors, adopting effective maintenance practices and technology, and using good forecasting techniques. It also seeks to minimize the time required for procurement, conversion, and distribution through fast transportation, efficient planning, and innovative processes. Additionally, supply chain management looks to eliminate undesirable or non-value added activities through business process reengineering to simplify the entire supply chain.

Uploaded by

Rocky
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Objective of a Supply Chain.

The main objective of supply chain management are as follows,


(a) Reducing Uncertainty. In SCM, there are three types of uncertainties. They are
supply uncertainty, process uncertainty and demand uncertainty. SCM reduces supply
uncertainty by identifying reliable vendors which helps in providing accurate information
and suitable transport facilities to the firms, while process uncertainty can be minimized
by adopting effective maintenance practices and innovative technology which are
helpful in preventing machine breakdowns. Adoption of good forecasting techniques
and better interaction with customers are found to be useful measures for reducing
demand uncertainties.

(b) Reducing Lead Times. Time required for the process of procurement, conversion
and distribution can be minimized by using fast transportation modes, efficient planning
practices and innovative process technologies.

(c) Eliminating Non-value Added Activities . SCM makes use of a concept called
"Business Process Reenginee-ring" in which undesirable or non-value-added activities
can be eliminated by unifying the tasks which makes the entire supply chain a simple
one.

(d) Enhancing Flexibility. By reducing set-up times and by using flexible


manufacturing and assembly techniques, efficiency can be improved. For example,
instead of purchasing raw materials in bulk, batches of raw materials provides
procurement flexibility.

(e) Achieving Process Quality. Supply chain management can be made effective by
producing quality products as per the standards for the very first time. This can be done
by identifying the causes of the quality problems through quality control charts, root-
cause analysis etc., and by eliminating them in future courses of action.

(f) Maintaining Uniformity (Modularization) . Production of variable products require


huge amount of inventory which not only increases the operation cost but also makes
the entire supply chain a complex process. This can be reduced by standardizing
products and services offered by the firm.

(g) Manages Demand. Unexpected and uncertain demands can be reduced by the
usage of effective promotion techniques which enables the firm to control the supply
chain, right from the process of demand generation.

(h) Delaying the Process of Differentiation . The process of value-addition through


product differentiation must be carried out only when customer wants something new or
innovative. This enables the firm to delay the differentiation process, so that customer
needs can be met without holding stocks in the entire chain. For example, assembling
the component parts according to the needs of customers, wherever it is required.

(i) Kitting of Supplies. In case of assembly operations, firm has to procure different
components from different suppliers. In such cases, entire process is hindered, if any of
the intermediate component is not available with the firm. Under such circumstances, in
order to ensure smooth flow of assembly operations, all component parts are kitted into
one set, such that there should be continuous flow of operations.

(j) Focusing on 'A' Category. It is a usual practise that the more valuable products,
important segments and customers get special attention when compared to others.
Hence, firm must focus more on `A' category products, segments and customers.

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