Managing Change in the Supply Chain

Providers of courier and storing services are increasingly in demand today. Understandably, it is impossible for a company to manage all affairs from upstream to downstream, especially if these are beyond the scope of the company’s core business. A company certainly cannot deal in all business areas. This means they will do the business that they master and outsource the rest to a company specifically dealing with these matters.

Rapid changes in technology, globalization, free trade and stiffer business competition are the four main factors compelling companies to continue to come up with innovations so that they can maintain their position as leaders in their line of business. Ensuring efficient supply chain management (SCM) is one of the ways toward reaching this goal. Research has shown that without effective application of SCM, a business, or even a nation, would lose its competitiveness in this increasingly global world.

A company usually has various departments, such as production, marketing, human resources and technical departments. However, the most important thing after a company produces a (new) product, finds a market and obtains orders from its customers is to meet the orders.

“It is here that the role of SCM is needed,” said Nugroyo Suryo, PhD, associate dean of Prasetya Mulia Business School, Jakarta, at a workshop.

The United Nations deems it important that SCM be applied by the companies it works with in many countries. The implementation of SCM can enhance competitiveness, which is why the UN organizes SCM training for corporate CEOs, particularly in developing countries.

The components of SCM include:

1. Demand planning: Forecasting

2. Demand collaboration: Collaborative resolution process to determine consensus forecasts.

3. Meeting orders: When can one promise a product to a customer, taking into account lead times and constraints.

4. Strategic network optimization: What plants and DC’s should serve what markets for what products — monthly — yearly

5. Production and distribution planning: Coordinate the actual production and distribution plans for a whole enterprise – daily

6. Production scheduling: For a single location create a feasible production schedule — minute by minute

7. Transportation planning: For multiple supply, manufacturer, distributor and warehousing points in a network

8. Transportation execution: Enactment of long-term plans on a per shipment basis, typically performed by forwarders

9. Tracking and Measuring: An ever increasing aspect of supply chain management designed to highlight potential against the plan and possible process improvements

10. Plan of reduction of costs and management of the performance: Diagnosis of the potential and the indicators, the organization and planifiaction strategic, masters dysfunctions in real time, evaluation and accounting reporting, evaluation and reporting quality.

(Burhan Abe/Source:

The Jakarta Post – May 29, 2007

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