supply chain management at the manufacturing

Industrial Supply Chain Management

Logistics is an integrated, integral part of the business, especially those related to trade, production, supply, etc. Moreover, any business, be it organizing and supporting a network of baby food outlets, or selling and servicing microelectronics (its products can also vary: a radio telescope can be considered a microelectronic device, or, for example, a small controller).

The tasks of logistics as a science and as a business tool are the following:

  • choice of the type of vehicle;
  • determination of routes;
  • organization of cargo transportation;
  • packing goods into containers;
  • Inventory Management;
  • storage in warehouse areas;
  • marking;
  • formation of group orders;
  • customs services and more

The importance of logistics and the significance of the tasks it solves

It would seem that all these are boring words, and this sounds, to say the least, unconvincing. Perhaps, but, as in every business process, the result is important and most eloquent. Profit for the entrepreneur, consumption for the buyer (or client). How deplorable this result could be if, say, in the course of a deal, a cosmetics store receives¬†some controllers by some manufacturer, and a fan assembly plant receives a tool to make a lady’s hair thick and shiny.

After such a “deal” one has not only to count the losses but also to spend funds to eliminate the damage caused. In addition, the damage is sometimes considered taking into account the damage for all failed trades that could potentially occur. So count it. And all because of a logistic mistake.

Supply Chain Management (SCM) is the organization, as it is believed by the B2B marketplace SourceMe for industrial components search online, planning, control, and execution of the flow of goods, from design and procurement through production and distribution to the end customer, in accordance with market requirements for cost efficiency. Information systems are designed to automate and manage all stages of the organization’s supply and to control the entire movement of goods in the organization. The SCM system allows you to significantly better meet the demand for the organization’s products and significantly reduce the cost of logistics and procurement. SCM covers the entire cycle of raw materials procurement, production, and distribution of goods.

It was found that the choice of the optimal batch of orders is one of the most important conditions for increasing the efficiency of the enterprise since their insufficient volume leads to an increase in administrative costs for repeated orders, and excess leads to freezing funds. Warehouse management in modern management systems is based on mathematical methods of inventory management. The first automated inventory management systems in industrial production were based on calculations based on the specification of the product composition. According to the product release plan, production plans were formed and the volume of purchases of materials and components was calculated. The end of the 60s is associated with the work of Oliver White, who, in the context of the automation of industrial enterprises, proposed to consider production, supply, and sales divisions in a complex. This approach and the use of computer technology for the first time made it possible to promptly adjust planned targets in the production process (with changing needs, adjusting orders, lack of resources, equipment failures). The goal of supply chain management is to minimize overall logistics costs while satisfying a given fixed demand.

Systems for management of orders (Order Management Systems – OMS) primarily help the buyer to form an order, taking into account his individual requirements. In addition, OMS systems allow you to evaluate the possibility of order fulfillment and can propose alternative options (using data on product availability and planned receipts). In case of production need, the OMS system transmits information about the order to the APS system to assess the possibility of its execution. Once the order has been placed, the OMS system allows it to be tracked at all stages using information obtained from the WMS, TMS and MES systems.

The functionality of modern SCM systems of class

1. Order management:

  • receiving, processing (registration), formation (generation) of orders based on the rules and instructions set in the system;
  • search and visualization of orders;
  • processing of distributed orders based on data from different sources;
  • formation of orders for purchases, transportation, production.

2. Planning and execution of transport operations:

  • ensuring the planning of simple one-stage and multimodal multi-stage transportation with the reloading of goods;
  • planning of container transportation;
  • assessment of operating time;
  • reservation of transport operations, etc.

3. Control of processes.

  • Event management:

notification of events in the supply chain in a form convenient for managers and customers; – response to events by performing routine operations

4. Contract management:

  • flexible configuration of operations related to the conclusion of a contract, taking into account currency and tariff characteristics;
  • typical schemes and models of customer service, taking into account geographical and other peculiarities

5. Finances:

  • calculation of the cost of order execution, taking into account the actual characteristics of the supply chain;
  • normative calculations of the cost of delivery;
  • formation and issue of invoices to clients;
  • support for payment systems

and much more.

Organizations will come under increasing pressure from global competition, rising prices, and increasing demands for quality and service in the new economic space.

Transport chains will need to adapt to changing conditions. This means serious consequences for logistics software. For example, in terms of promising functionality, centralized systems, transportation cost modeling, and the ability to plan, simulate and optimally organize value chains and networks around the world will become strategic tools for global competition.