Supply chain management is the process through which any organization develops its means to locate the raw materials required to make the products as well as for their production and distribution till end customers. The major components that are used by the supply chain management have been compiled below.
ProductionThe foremost element of the supply chain management is production. The focus on this element is mainly on the type of products that are in demand in the market as well as the products that are wanted by the customers. In this element there are many aspects that are put into consideration. The first decision taken by the company is regarding the type of product to be manufactured. After this, the company settles on the number of products to be made as well as what production aspects should be outsourced.
SupplyThe second main element of supply chain management is supply. This element focuses on the capacities and abilities of the plant operations of the company. The company decides on the number of products that are economical and can be produced feasibly. Most of the companies outsource some part of their production requirements to other organizations. In this element, the company also begins to find the suppliers of raw materials for the productions. This requires the comparison of many aspects such as quality and price of the supplies.
Transportation and location
The elements of transportation and location work in coordination in the supply chain management. A company finds out the best location for the production of the required goods. The decision is taken after considering the present customers and the available resources. The companies also determine the most suitable methods of transportation of the goods. The transportation method should be able to provide the smoothest possible distribution of goods.
Information
This is the final element of the process of supply chain management. Organizations that make use of supply chain management must execute methods to record and pass the accurate and effective information. It comprises of utilizing automated software that link together all the computer systems.
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