Supply Chain Management involves many processes, from production preparation to consumer needs. The following is an explanation of the role and function of each process in it.
1. Planning
Several activities are involved in the planning stage, from forecasting consumer demand, purchasing planning, and production planning to labor preparation and transportation.
Forecasting consumer demand (demand forecasting) is carried out so sellers can determine the type and number of products that must be prepared during a specific period. This is important to ensure that the process of producing and selling goods is by consumer demand.
In making forecasts, sellers should look at sales and inventory reports and pay attention to market trends. To perform demand predictions automatically, sellers should consider using an inventory management system suitable for their business. This system provides accurate inventory reports and forecasting tools allowing users to get predictive results in seconds.
2. Purchase or Procurement
After knowing the types and quantities of goods that must be purchased through demand forecasting, now is the time to obtain these goods. Procurement is the acquisition of goods at the best price, in the correct quantity, and at the right time.
The procurement process usually involves several stages: purchase submissions, assessment submissions, purchase approvals, and orders to suppliers. Admin is responsible for checking and recording what he has to buy and then submitting it to the purchasing manager.
Procurement will become easier and simpler with the help of purchasing management system. With this software, the purchasing department can instantly create quotation requests, purchase orders, purchase approvals, and umbrella contracts. Good procurement software even provides a supplier portal to speed up the ordering process for suppliers.
3. Production
The production process is processing all raw materials into finished products. This process usually involves not only human labor but also machines. Stops in the production process can cause delays in the delivery of orders and lead to customer dissatisfaction. Therefore, downtime must be eliminated by ensuring workforce productivity, machines, and equipment.
4. Warehouse Management
After the production of goods is completed, the goods must be entered into the warehouse. Warehouse management consists of entering (inbound) and outbound (outbound) goods, picking and packing, cross-docking, and stock taking.
All incoming and outgoing goods must be recorded. The stock-taking must also be carried out periodically, so there is no difference between the actual physical amount of goods and the number of goods recorded in the books. All these time-consuming warehouse activities can be automated with the help of warehouse management software. To find out more, you can download the warehouse software pricing scheme from HashMicro. This warehouse system is more prevalent among small and medium-sized businesses.
5. Order Delivery
After picking up and packing the ordered goods from the warehouse, the next step is to send them to the customer. Courier and transportation must be prepared so the goods can be shipped immediately.
To ensure that orders reach the customer promptly, the seller should have tools to track the courier. With the best supply chain management system, you can follow the courier’s whereabouts via smartphone. This system also allows the courier to confirm when the order has arrived at the customer.
6. Order a Refund
Order returns usually occur when a customer requests a return due to damage, error, or delay. This process involves several activities, such as checking product conditions, authorizing returns, replacing products, scheduling deliveries, and refunds.