DLMD Consultancy Limited.
Supply Chain Management
Since its first
appearance Supply Chain Management has been considered the domain of Operations
Management, but we at DLMD Consultancy know it as a Strategic function that
works hand-in-hand with an organisations Financial and Marketing forces.
To understand this better
let’s look at the functions.
Demand management
'Demand Management' can be considered as having four DRIVERS,
these are:
- Order
Penetration – This is how far into an organization a customer order
impacts. An order for Make-To-Stock products reaches the Distribution area,
Assemble-to-Order to Manufacturing, Make-to-Order Purchasing and the
existing Vendor network, Engineered-To-Order may mean exploring new
suppliers and technologies.
- Customer
Service Level Requirement – With the Order Penetration established a
Customer Service Level can be established. This covers Lead-Time
reliability, reaction times, emergency order and back order policy, etc.
- Forecasting
– This can range from a direct forecast from a customer to an elaborate
statistical technique. BUT we at DLMD consultancy know that for a forecast
to work the processes behind it and associated to it need to be considered.
This means such things as forecast responsibility, forecast versus actual
performance and linkage to the organizations Budgetary Cycle.
- Budgetary
Cycle – Much of the data derived from Demand Management will
contribute to an organizations budgetary cycle BUT the budgetary cycle has
the responsibility to define the scope and horizons to which Demand
management can implement its forward planning.
It should be remembered that it is Demand Management that sets the
organizations capability to promise customer orders and is responsible for
monitoring the consumption and rate-of-consumption of forecasts. Demand
Management’s output is the Driver of the ‘Supply Chain
Planning’ activities.
Supply Chain Planning
‘Supply Chain
Planning’ is the elaboration of the three major planning areas of Operations
Management, i.e. Distribution & Transportation Planning, Inventory
Management and Production Planning.
Distribution & Transportation Planning – This is concerned
with the optimisation of the physical movement, (inbound and outbound), and
storage of stocks throughout the distribution network. Among the concepts
deployed here are Master Ship Scheduling (MSS), Distribution Requirements
Planning (DRP), Equal Time Supply and Fair Share Allocation.
Inventory Management –
Is responsible for setting inventory parameters, such as order points and lot
sizes as well as the stock levels and replenishment plan within the distribution
network. In a ‘Spares Parts’ environment it may also take responsibility for
sub-assembly inventory levels to support production planning.
Production Planning – Is
responsible for the delivery of Finished Goods or assemblies to distribution
while optimising the resources of available capacity and materials. A variety of
concepts are available to ‘Production Planning’ to assist in the process of
performance optimisation, these include Master Production Scheduling (MPS),
Material Resource Planning (MRPII), Just In Time (JIT), Theory of Constraints
(TOC) or Advanced Planning & Scheduling (APS).
We at DLMD Consultancy have developed a ‘Business Control Model’ that
identifies the work and information flows and considers these concepts.
Upon this background the
"Effective Supply Chain Programs" are designed, set up and implemented
by DLMD Consultancy.
Customer and supplier
integration
The key to optimising the Supply Chain, is in companies looking and working
beyond their own boundaries: in streamlining the total network, both the
customer and the supplier plays an essential role. The concepts of Collaborative
Planning, Forecasting and Replenishment (CPFR), Vendor Managed Inventory (VMI)
and Efficient Customer Response (ECR) are all party to the goal of 'Customer and
Supplier Integration', but we at DLMD Consultancy stress: “The true value of
integration is not in the capture of information BUT in the actions taken on
this information”.
DLMD’s Consultants not only advise on the execution of the concepts,
but also focus on the integration process itself: where the power links are in
the chain, the target participants from all parties, the accrued benefits of
sharing and how to deal with risk.
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