Supply management is a process that takes place in companies of all sizes and descriptions. In some instances, the supply chain management process is highly structured, especially in large corporations that operate multiple facilities. However, even a small business will need to employ some basic supply chain policies and procedures in order to adequately manage purchasing and inventory functions. Choosing the right supply chain management process essentially involves identifying the scope of each function in the process, defining the particulars of each step within that process, and making sure the overall flow of the process has the checks and balances necessary to meet the needs of the company.
For the most part, just about any supply chain management process will address four key elements: location, production, inventory, and transportation. Depending on the size of the operation, there may be the need for only a simple process that meets these needs. For example, a small business with only one location to consider will not require a management process that accounts for distribution or transportation to multiple locations, so there is no need to build in a complicated set of steps to address this issue. A small business owner can do very well with a process that focuses on acquiring the inventory needed to operate the business at the one location. There are no real transportation worries other than deciding how to move the items in the inventory to wherever they need to go in the one facility and still keep the inventory current.
A supply manager who deals with a chain that must meet the needs of multiple locations will require a much more detailed and sophisticated supply chain management process. In this environment, the four basic components of the supply chain will be supported by a number of individual rules, regulations, and processes that carry out the function of each component. The larger flow of supplies through the operation will require that the process be structured for greater accountability, since many more steps are necessary in terms of securing inventory and transporting the needed goods to each location that is served.
With any supply chain management process, software is often helpful in keeping the processes of inventory and warehouse management in line. Software can streamline procedures that were once performed manually, such as processing and approving department requisitions, placing and receiving orders, updating the inventory, and issuing items to various locations and departments within the company structure. For smaller businesses, there are low cost supply management software packages that will do fine. Larger corporations will require more sophisticated software that can be networked to allow managers and supply personnel at varying levels to always know what is inventoried where, what is on order, and what is in transition from one location to another.
Before creating any type of supply chain management process, it is essential to define the needs of your operation, including keeping up with the financial aspects of the inventory. Often, new businesses will benefit from calling on the services of a professional consultant who can assess the current needs of the business and help make a decision on management process that will meet the needs of today as well as adapt and grow as the business begins to expand.
