What Is Closed Loop Supply Chain Model?

Closed loop supply chain models are different from a forward supply chain model as in the former case, the good meant for sale are not only transferred to the ultimate consumers but are also sourced back for different purposes at a later time. There are several provisions in the case of a closed loop supply chain model that allow companies to acquire the products that they sold earlier and use them for remanufacture or any other profitable activity. This creates a circular supply chain in which materials are recycled and remarketed from time to time.

Most companies practice closed loop supply chain models by incorporating elements like the chance to return products after a 60 day, 90 day or 120 day period or by allowing sales returns. Certain companies also initiate offers of receiving back goods that may have been purchased a significant number of years ago by customers in exchange for new products at a much reduced price. They thus use their existing customers for the generation of possible raw materials that can be reworked into new products.

Although most companies spend a high amount of time, money and energy on forward supply chain models, very little time is spend on closed loop supply chain models as they are generally seen as being less profitable. However, companies must realize that such supply chain models, if implemented and monitored properly can indeed bring huge returns for businesses with a decreased amount of investment in sourcing new raw materials. Close attention should thus be paid on integrating forward moving supply chain activities with backward ones in which products are acquired. There are several stages that form a part of a typical closed loop supply chain model. These are:

1. Informing customers about possible offers under which they can return back products they may once have bought and the means to do so. This will consist of a certain amount of advertizing so as to generate awareness about the possibility of returning items. 
2. Another aspect associated with such models is having a quality inspection team in place to sort through the materials collected from the ultimate consumers. Such a team can classify the useful elements from the useless ones.
3. The company can then formulate different ways of working the collected materials into the production processes to come up with brand new products to be sold to consumers.

For more details about Supply Chain Management, visit McLane Logistics Technology, 4001 Central Pointe Parkway, Temple, TX 76504 or call them at 1-800-989-7568.

Supply Chain Management Software Solutions - Supply Chain Management System

Common Issues Encountered In Supply Chain Management

Supply chain management forms a vital part of the business processes required to run operations in a smooth manner. Without having the appropriate supply chain management systems in place, there can be a lack of coordination within your company along with a disruption in supplies when they are demanded by customers. An efficient system helps address several needs related to replenishment of stock reserves and also helps ensure that your company is able to sustain the market demand for certain products. This is a very important aspect of supply chain management as a delay in providing supplies can cause your existing customers to shift to the competition in order to fulfill their needs for certain products that they require.

Some of the common issues that you may encounter in supply chain management have been specified below:

1. Loss of goods at several stages of the supply chains is one of the most widespread problems for most companies dealing in the trade of tangible goods. This loss can be due to a variety of factors including pilferage, theft, misplacement, etc. An efficient supply chain management system helps pin point the exact causes of the loss of products so that you can take suitable measures to correct such anomalies in terms of the count of goods that was originally manufactured for supply.
2. Another common problem that many companies face is the huge costs that are associated with manual record keeping of stocks. Several employees may have to be employed by an organization to perform record keeping functions especially in companies that deal in a vast volume of products on a daily basis. In such a case, there is also a chance of human error creeping in as manual counts are maintained by individual employees. Supply chain management software however can help eliminate such problems as it helps bring in automation in counting functions.
3. Companies may also find it difficult to predict the demand for their products in the market and may not know exactly how much quantity to order for sustaining the market demand. Supply chain management software generally contain useful applications that can help make such predictions based on sales data.

For more details about Supply Chain Management visit McLane Logistics Technology, Central Pointe, Parkway, Temple, TX 76504 or call them at 1-800-989-7568.

Supply Chain Management Software - Supply Chain Management Software Solutions