* What do you understand by Supply Chain Management? Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption. SCM as the “design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally. Supply chain management is the systematic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole. * Explain complete supply chain cycle starting from Business Planning to Sales and including procurement(for MTO and MTS environment)?
Two of the most essential elements of a supply chain for any organization are its sales and operations teams. While one represents, promotes, identifies and captures the demand for the organization’s products or services in the market place, the other co-ordinates the supply of the firm’s products or services committed to its customers. Both are central to a company’s objectives of higher profits and revenues at lowest possible costs. However, these objectives take a severe beating due to the lack of co-ordination between the sales and the production.
This lack of coordination has far reaching effects throughout the supply chain. An essential requirement of having an integrated supply chain is to provide visibility across the different functions and enable a seamless flow of material, information and funds across its boundaries. A lack of sync between the demand and supply leads to a fragmented supply chain. A Sales and Operations planning process is the answer to remove this disconnect and forms an essential element for an integrated Supply Chain.
APICS defines the S&OP process as the “function of setting the overall level of manufacturing output (production plan) and other activities to best satisfy the current planned levels of sales (sales plan and/or forecasts), while meeting general business objectives of profitability, productivity, competitive customer lead times, etc. , as expressed in the overall business plan”. The Strategic Business Plan sets the company’s long term objectives and gives a general direction on how the organization can best achieve it based on inputs from its sales, production, and engineering and finance teams.
The strategic business plan provides the direction and the boundaries to the functional teams to prepare their own plan in line with the organizational objectives. S&OP process is a collaborative forum where the cross functional teams from sales, production, finance and materials interact with the higher management to track and discuss the changes in the market conditions and its corresponding affect on the sales plan and the Strategic Business Plan every month