THE FIVE BASIC SUPPLY CHAIN MANAGEMENT COMPONENTS

Plan - This is strategic portion of supply chain management. A company must have a plan for managing all the resources that go toward meeting customer demand for product or services. A big piece of planning is developing a set of metrics to monitor the supply chain so that it is efficient, cost less, and delivers high quality and value to customers.


Sources - Companies must carefully choose reliable suppliers that will deliver goods and services required for making products. Companies must also develop a set of pricing, delivery, and payment processes with suppliers and create metrics for monitoring and improving the relationship.


Make - This is the step where companies manufacture their products or services. This can include scheduling the activities necessary for production, testing, packaging, and preparing for delivery. This is by far the most metric-intensive portion of the supply chain, measuring quality levels, production output, and worker productivity.


Deliver - This step is commonly referred to as logistic. Logistics is the set of processes that plans for and controls the efficient and effective transportation and storage of supplies to customers. During this step, companies must be able to receive orders from customers, fulfill the orders via a network of warehouses, pick transportation companies to deliver the products, and implement a billing and invoicing system to facilitate payment.


Return - This is typically the most problematic step in the supply chain. Companies must create a network for receiving defective and excess products and support customers who have problems with delivered products.


Example : TESCO