Introduction

“Ganeshan and Harisson” have defined Supply chain management as a “ Network of

facilities and distribution options that performs the functions of procurement of materials,
transformation of these materials into intermediate and finished products, and the distribution
of these finished products to customers”. “Lee & Corey ” stated that “SCM consists of the
integration activities taking place among a network of facilities that procure raw material,
transform them into intermediate goods and then final products, & deliver products to
customers through a distribution system”.

Every supply chain of a company is different from another in terms of its operating
challenges, have unique set of their layout and as per market demand in their respective
industry.

Supply chain of any company must take decisions individually and collectively taking
following 5 key points in consideration:

 Production- What product does market want? How much of Each product should be
produced and It’s production schedule. This action takes into account of master
production schedule that takes into account different factors like plant capacity,
equipment maintenance, and quality control parameters.

 Inventory- What inventory should be there at each level of supply chain? How much
inventory should be there for raw material, work in progress, or finished goods? The
primary and most important purpose of inventory is to act as buffer and help in
overcoming challenges due to uncertain factors.

 Location- Where should facilities be located for inventory and production? What are
the most cost effective locations that can provide competitive edge? Should existing
location be used or to build a new one? Once these above questions are answered the
path for delivery to customer can be determined.

 Transportation- Which mode of transportation to use in different scenario? Whether

to use LTL or FTL? Whether to use hub and spoke model? Is Direct shipping with
milk run beneficial or to opt for Shipment via distribution centre? What are the route
optimization softwares to be used?

 Information – This is the most crucial factor among different level of supply chain
and can generate to many problems like Bullwhip effect which can affect overall
profitability of supply chain. Accurate and timely information will promise of better
coordination and better decision making.

The sum of above decision will define the competitiveness and effectiveness of
company’s supply chain.