Supply Chain Activities / Functions of a Company:

Supply Chain Management is a cross functional approach to managing the movement of raw
materials into an organization and movement of the finished goods out of the organization
toward the end consumer.
Several models have been proposed to understand the activities required to manage material
movement across organizational and functional boundaries.
SCOR is a supply chain management model promoted by the supply chain council. Another
model is the Supply Chain Management floated by the Global Supply Chain Forum (GSCF).

Supply Chain activities can be grouped into strategic, tactical, and operational level of activities.
A firm’s Supply Chain Management efforts start with the development and execution of a long-
term supply chain strategy. Among other things, this strategy should:
 Identify what supply chains the firm wants to compete in
 Help managers understand how the firm will provide value to the supply chain.
 Guide the selection of supply chain partners, including suppliers, subcontractors,
transportation providers, and distributors.

As firms gear up to understand what supply chains they compete in, it is often valuable to map
the physical flows and information flows that make up these supply chains. From these maps,
firms can begin to understand how they add value, and what information is needed to make the
supply chain work in the most effective and efficient way possible.
Of course, the firm’s supply chain strategy does not exist in a vacuum. It must be consistent with
both the overall business strategy and efforts within such areas as purchasing, logistics,
manufacturing, and marketing. The Supply Chain activities must be clearly spelled out for the
given business.
Strategic activities:

 Strategic network optimization, including the number, location, and size of warehouses,
distribution centers and facilities.
 Strategic partnership with suppliers, distributors, and customers, creating communication
channels for critical information and operational improvements such as cross docking,
direct shipping, and third-party logistics.
 Product design coordination, so that new and existing products can be optimally
integrated into the supply chain, load management.
 Information Technology infrastructure, to support supply chain operations.
 Where to make and what to make or buy decisions.
 Align overall organizational strategy with supply strategy.

Tactical activities:

 Sourcing contracts and other purchasing decisions.

 Production decisions, including contracting, locations, scheduling, and planning process
definition.
 Inventory decisions, including quantity, location, and quality of inventory.
 Transportation strategy, including frequency, routes, and contracting.
 Benchmarking of all operations against competitors and implementation of best practices
throughout the enterprise.
 Milestone payments.
Operational activities:

 Daily production and distribution planning, including all nodes in the supply chain.
 Production scheduling for each manufacturing facility in the supply chain (minute by
minute)
 Demand planning and forecasting, coordinating the demand forecast of all customers and
sharing the forecast with all suppliers.
 Sourcing planning, including current inventory and forecast demand, in collaboration
with all suppliers.
 Inbound operations, including transportation from suppliers and receiving inventory.
 Production operations, including the consumption of materials and flow of finished
goods.
 Outbound operations, including all fulfillment activities and transportation to customers.
 Order promising, accounting for all constraints in the supply chain, including all
suppliers, manufacturing facilities. distribution centers, and other customers.
 Performance tracking of all activities.
 Thus, Supply Chain activities depend a lot on a firm's business model as also on how it
wants to move.
Nestle Supply Chain Activities:

Supply chain management has gaining its importance in serving business operations and being
part of strategic management of the business. Its role has been shifted from being a support
department to being the core department of business with strategic importance and role to play in
overall operations of the business.
In modern business world no organization can sustain without having a well-established,
effective, and efficient supply chain management. The role of vendors along with vendor
management with the introduction of information technology is important consideration for
organizations.
To understand the strategic supply chain management, key concepts and use of information
technology to maintain the vendor relationships, this report in presented on one of the leading
FMCG company Nestle. Their products range is wide, and the concentration of this report is on
organization’s Pakistan operations. Since Pakistan is the part of their global supply chain
operations but for their milk products, they must rely on the local milk suppliers who are not
very much educated and well equipped. Therefore, managing them is a challenge for the
organization and same challenge and its handling is under study in this report.
There are some recommendations also given at the end so that improvements can be made in
local supply chain. They say-

“Supply chain professionals at Nestlé play a critical role in ensuring the quality of products
that reach our customers and consumers. To achieve this, we collaborate with the
commercial teams to develop the demand forecast, and with our suppliers around the
world to ensure responsibly sourced materials. In alignment with operations, we balance
inventory levels to establish the right supply of our products.
Once produced, supply chain is responsible for safely storing and transporting our
products to meet our customers’ and consumers’ needs in-full and on-time. We are an
aligned, agile, and adaptable organization that is committed to delivering results, not only
within supply chain, but also in support of overall business priorities.
Supply chain professionals can take many different paths in building a rewarding career at
Nestlé. Whether you join us in Demand and supply planning, Procurement, Physical
logistics or Customer service, you’ll help us gain a real competitive edge by bringing us
closer to our customers and making sure our products are available at the right time in the
best condition.
With the large scope of opportunities at Nestlé, you can change roles and locations, even
globally.”
Nestle Procurement:

As strategic partner of the business, their procurement team helps the company achieve
sustainable growth. Procurement professionals at Nestlé, ensure responsibly sourced supply and
create value. Located in hubs in Switzerland, Panama and Malaysia, the division provides a
range of services, including the management of procurement for specific raw materials,
packaging, indirect materials, and other services. The hubs also support markets with managing
local spend.

For you, that will mean the opportunity to become a real strategic partner – delivering
sustainable value and working with the business, for the business.