Unlock the Supply Chain Chaos



Supply Chain comprises of the entire system from the manufacturing & production of product or service, to the point of delivery to the End buyer. Mapping of the Supply Chain is a critical, strategic process affecting the whole organization on a broader perspective. Each stage of the Supply Chain is essential for the organization to define its market.


THE INVENTORY

The Inventory is like the rocks under a flowing river. Everything looks good when water is full (order book is full, production capacity is full). During any surges of sudden macroeconomic situations arise, like COVID shutdowns, recession in some areas of the world, etc., the patchy side of the Inventory river starts showing up with rocks and islands of sand coming up.


Every Item number is unique to the requirement. There are two areas where an SME could look under the Hood - A transparent and integrated ERP system combined with Supply Chain Analytics and an AI engine. The above combination is extremely rare and a perfect combination. Unfortunately, not many organizations can afford or have access to this facility.


The ideal way to handle inventory is to organize the items into a Pyramid. The Pyramid has a large base that indicates the Inventory that needs storage at last and the tip of the Pyramid quantifies the Inventory that needs least storage. As a thumb rule, the large base of Raw Materials is at the bottom. The mid portion of a little less quantity is that of Work in Progress (WIP) materials and the tip that needs minimum storage is the Finished Goods (FG). In case of an organization that has a long term contract with forecasts and blanket P.Os, then the risk involved is covered to an extent, else it is purely gambling.



JUST IN TIME (JIT)

The original concept of Just in Time was derived from the Toyota Motors. The main Toyota Production Planning was flown down to the individual Tier 1, Tier 2 and Tier 3 suppliers. Currently, everybody is seen bashing Just in Time deliveries and the whole philosophy. The objection in this case rests that, whenever there are changes to Production Run rates at the Assembly plant, the exact product mix is easily communicated to the Supply base and the switch is made immediately.


While visiting Toyota plants anywhere in the world, one wouldn't fail to notice that the whole supply base sets up shop right next to the Toyota Assembly plant, down to the level with exact sequence of Seats and their Colors to be loaded (in reverse order) on the delivery truck that they go straight from Dock to the Assembly Area.


SUPPLY CHAIN ANALYTICS: What is all the buzz about?

Most days, buyers start their day reviewing their Receipts from yesterday, following up on Inventory and receiving teams to update the system and then calling the suppliers to see what is in TRANSIT and basically identifying the CRITICAL SHORTAGES in the organization.


Supply Chain Analytics / Control Towers are doing that manual job and making it easier for the Supply Chain Actors. Using an algorithm and some parameters that are set up by the organization – they list out all shortages by order of criticality. Supply Chain Analytics sorts and prioritizes the workflow for Purchasers / Buyers across the company.


SUPPLY CHAIN MANAGEMENT

Fundamentally, Supply Chain Management has five different processes also known as components of Supply Chain Management – Plan, Source, Make, Deliver and Return.


The application of latest and smart technologies to manufacture and utilize sources has been named Industry 4.0. With Industry 4.0 smart technologies such as AI & Machine Learning, automation, Internet of Things, etc., the manufacturing, maintenance, and delivery of new products and services, has evolved within organizations and requires minimum manual interference.


Before the onset of Industry 4.0, the enterprises would typically wait until a machine had malfunctioned to fix it. Industry 4.0 has revolutionized that. Failures are now predicted before happening, and insights to prevent it is given, to avoid Supply Chain disruption. Supply Chain Management today is using smart inputs from technology to make the supply chain and the organization smarter.


Get more Actionable Insights into your Supply Chain Management journey by watching the “Supply Chain Management: A Dream or Nightmare" webinar.