Every product pass-through different manufacturing cycles before getting in the hands of consumers. All the processes involved in the manufacturing of products from raw material to the finished product including logistics and sales concerns are management by supply chain management.
Products move in the vertically integrated chain of manufacturing lines to add value to a product at each stage.
Supply chain management excel templates control the value addition process to eliminate any delay and unused buffers along with non-value adding activities.
What is Supply Chain Management?
Supply chain management planning is a process of managing all the process that takes part in the value addition of the raw material into the consumer product. Processes involved the inflow of information; goods and money are also managed under the same domain.
The flow of the goods from the manufacturer, distributor, retailer, and the consumer along with information/knowledge is important to effectively manage to ensure timely deliveries of the product to the users.
It helps to streamline the flows to add maximum value to the product and gives core competency to the business.
An effective supply chain management from the supplier is a sign of commitment toward the sustainable quality of the product. Suppliers involve the whole supply chain in the process of product development, production, and sales.
Supply Chain Management (SCM) Significance
Supply chain management plays an important role in the management of resource planning, production, delivery, complaint, and feedback system.
It signifies customer loyalty by timely delivery, streamlined process, and improved after-sales services.
Supply chain management controls the cost structure of products such as procurement of raw material and other resources, inventory management, production of goods, production scheduling, and freight costs. The fixed costs of the process are also better controlled through an effective supply chain process.
Cost management using the supply chain process results in profit and net cash flow of the company to stabilize the financial position of the company.
The key performance indicators (KPI) of the supply chain management process are; inventory management, inventory transactions, and discrepancies in inventory maintenance disturbed cost structure and delivery schedules.
Supply Chain Management Template Work Process
Before going into designing an effective supply chain management process for product delivery and distribution of goods after value addition to its end users.
Customers not only demand good pricing channels but also ask for the earliest deliveries of the product to minimize the lead time of their orders that help in managing their inventory efficiently.
Therefore, the focus of business is not just to minimize the cost of production. It’s also important to work to improve delivery schedules and inventory management techniques.
Supplier inventories, stores, production, distribution, and sales of products are also kept under the keen consideration of supply chain heads of the supply chain management team.
Along the whole supply chain, at manufacturing stages, the output of each manufacturer is the input for the other manufacturer. Moving from the lower to the higher side of the supply chain, value is added to the product with reference to customer demand. This value addition process is monitored carefully to avoid the loss of resources.
The product development, raw material source, production line, production delivery schedule, and feedback system are key points of the supply chain process. The feedback system is given equal importance for many reasons such as to improve productivity, efficiency, and quality improvement.
The supply chain is mostly conceived wrongly as procurement of inventory items and logistical aspects of product delivery. This concept must be rationalized and correctly to avoid loss of product value and high inventory costs of any business.
Management Processes Involved in Supply Chain Management
The scope of the supply chain process ranges the whole supply chain from raw material to finished product. A few of the core processes of the supply chain management system are; supply chain planning, production planning, and material requirement planning.
The supply chain planning process involves two major business approaches known as sales and operations plans and integrated business planning. Forecasting sales demand is important to implement the approaches by gathering, discussing, and reconciling the demand data for effective production planning.
The production planning process of the supply chain is also important along with the material requirement planning. This system use sales orders to design the shortest manufacturing time process for improving lead times of customer orders.
It allocates the arranged resources, machinery setup, and human resources to manufacturing an ordered quantity of product with specified quality parameters.
Material requirement planning involves the arrangement of all required resources mentioned on the bill of material of certain orders to produce as per the set production plan. It sets resource delivery to align with the production plan to minimize the inventory as well.
Requirement planning is divided into major classifications, material requirement planning (MRP-I), and manufacturing requirement planning (MRP-II).
In manufacturing requirement planning or MRP-II, the arrangement of resources other than materials is managed. These resources can be Human resources, MIS, finance, and accounts teams.
Procurement, sourcing, and suppliers’ relationship processes are also supplied chain management processes that are equally important and management parallel to the above-discussed core processes.
As supply chain management flow process involves stakeholders from the arrangement of raw material to the value addition at each stage. Goods, information, and money are transferred between stakeholders over the supply chain.
The flow of goods or materials, data or information, and money are the main type of flows involved in the supply chain management process.
Material flow in supply chain management is important to manage inventory costs. Raw material and output of lower manufacturing facilities are stacked in the warehouse of the higher-level facility over the supply chain involves costs and risks.
Manufacturers, distributors, dealers, and retailers all want minimum inventory in the warehouse. It is desired to have rigid material flow strategies in the supply chain to ensure the smooth and quick flow of material along with cash flow.
The flow of information assists in the flow of material as well as money. A lot of documentation and backflow of information are required for a quick and balanced flow of materials.
Information such as Performa invoices, commercial invoices, shipping documents, reports, and quotations is important along with the reverse flow of order confirmations and feedbacks.
The smooth flow of material and information results in the smooth flow of money. Money transfer flow isn’t coming at last, but this phase is integrated with the flow of goods and information.
Different payment strategies of businesses involve a different type of money flow such as cheques, telegraphic transfer, and letters of credit are the most common means.
Differences of Procurement VS Supply Chain Management
However, procurement management and SCM have a direct relation to each other. You have to remember procurement is the core of SCM. Here you can understand 3 major differences between them:
- Procurement management focuses on input however, SCM emphasizes on output or we can say delivery.
- In procurement, we focus on acquiring or storing supplies, and in the supply chain, we deal with all of the procedures.
- Procurement endorsement production growth and in supply chain management we deal from production to distribution and delivery.
- The main goal of procurement is to make sure the consumer gets goods and services at a cost-effective price.
Note: The core function of SCM is to accelerate and keep a steam flow of the whole supply chain process.
Review: Procurement Management Plan.
Supply Chain Excel Template
SCM template helps to track and evaluate Supplier details, material purchase details, the quantity of material, single unit cost, invoice, and bill payment.
- Assist us to work efficiently
- Helps to save time
- User-friendly interference
- Professional tracking reports
- Record data Effectively
How to Create Supply Chain Template in Excel?
Now, you can make your own stock inventory workbook according to your requirements. You do not need to buy expensive and complex software to a medium extent.
Images and examples are mentioned above show brief details that will help you to determine how many columns and rows are you need on the scale of the displayed image.
Open a new excel document and then select the number of columns as required according to items in your inventory.