Supply Chain System
A supply chain system refers to the system a business enacts to manage the transformation of raw materials to finished goods. This system will manage all the workflow stages involved with manufacturing, inventory, storage, and delivery. These processes will vary from industry to industry but all entail various stages of planning, sourcing, manufacturing, delivery and return workflows as materials make their journey to the end user. Often, supply chain inventory consists of raw materials or ingredients used in manufacturing.
Business Supply Chain Management
The application of different supply chain systems helps businesses to run based on circumstances specific to their products. The planning stage is important in determining productivity and profitability levels of the company. Planning attempts to match production with demand, often using analytical tools such as inventory software, to determine the right amount of inventory to carry while limiting inventory investment to a minimum.
There are several different models a business can follow:
Agile: Used for specialty items, namely make-to-order products
Continuous Flow: For products having a constant level of high demand
Custom Configured: Customized at the production and assembly stages
Efficient Chain: High competition products where high efficiency allows the business to keep costs lower
Fast Chain: Trendy or Short Cycle Products, i.e., clothing.
Flexible: A versatile approach that adapts to peaks and lows
Supply Chains Operations Reference (SCOR): Ongoing improvements to reduce waste
What is a Supply Chain System?
Your supply chain system is a sum of its parts; those parts interact with one another to create a symbiotic relationship. When making changes, remember that altering one area can have a rippling affect and impact other areas, but focusing on fixing one area alone may not have the overall impact you are striving to achieve for the entire system.
Overseeing the movement of inventory at your supply chain can be just as important as managing it on your home turf. If your supplier is assembling product for you, but inefficient in doing so, creating waste and additional costs, the cost to your business will be higher than it needs to be. Reasonably, if you can work with your supplier to share information to the mutual benefit of both companies, the outcome stands to lower costs, lead time and increase profitability for both parties.
So, what tends to get in the way of this communication?
- Delayed feedback – Perhaps the supplier refrains from saying anything about equipment repair until it is repaired, and he can provide an accurate lead time update.
- Transparency of relationship – If you are working with an international supplier, you might be working with cultural differences. Some foreign suppliers prefer not to deliver any bad news.
Ultimately, having a predictable lead time is better for your business than a shorter lead time. Predictability facilitates production planning, and a fixed lead time will dictate how often to place purchase orders to replenish inventory on time.
And the rate of information flow directly impacts reaction time. Improving lines of communication between your business, especially in the flow of data, can improve the overall impact on your business.
The Sourcing Stage involves the selection of suppliers for materials. A transparent relationship with the supplier will improve communication and keep you abreast of any equipment malfunctions likely to delay delivery. Planning around the lead time is vital in determining reorder points because it requires confidence in the minimum and maximum times to deliver goods to your facility. Wherever perishable items such as food products, chemicals, or formulas are involved, the shelf life directly impacts the maximum amount of time that product can be held before it is no longer saleable.
Receipt from Vendors
All the stages of a business supply chain system can be efficiently managed in SOS Inventory software. Any number of suppliers can be designated in your SOS account with the ability to list multiple suppliers per product, receive multiple purchase orders from a single vendor on one receipt, create blanket purchase orders, process returns to vendors and manage partial receipts.
Production and Inventory Control
From the moment a delivery arrives at your service dock, through finished goods delivery to your distributor or wholesaler, SOS Inventory keeps track of all the stages, costs, quantities, and other essential information your business needs to track. Create builds, assemblies, kits, and product templates using a bill of materials. When raw materials are removed from inventory for production, their counts will update in real-time. When quantities drop to reorder points, generate purchase orders manually or automatically to any vendor.
When finished product is ready, SOS Inventory can create pick tickets, track product at any location, and manage fulfillment and invoice creation. When purchase orders must be paid or sales need to be processed, SOS Inventory can send all your data directly to QuickBooks Online.
Being able to track and analyze product performance is pivotal to decision-making. SOS Inventory provides over fifty different report types to offer deep dives into different levels of inventory information from cost analysis to sales performance and more.
Delivery to Distributors or Wholesalers
Equally important to creating quality products is delivering them on-time and in good shape to the buyer. Choosing the right shippers and method of shipping are important to ensuring money isn’t wasted on the wrong size packaging or accumulation of accessorial fees. SOS Inventory connects to your choice of shipping service to maintain continuity of information and seamless customer sale processing. Supply chain software for wholesale and distribution businesses provides necessary insight for profitability.
If you’re looking for the right tool to set up an efficient supply chain system, SOS Inventory offers your business valuable features, great support and an affordable price point to make the decision and implementation easy as can be.