A Hallmark of the Agile Manufacturer
Today's manufacturers are under unprecedented pressure to deliver their products on time with razor-thin margins, while needing to provide near-real-time feedback to their suppliers in order to keep inventories and shipping costs to a minimum. Many process steps that were performed internally in the past are now being outsourced, requiring the agile manufacturer to treat its suppliers as extensions of its business. Large inventories of raw or work-in-process material are no longer an option, because of the costs associated with storage.
Supply Chain Management (SCM) solutions focus on these relationships with outside suppliers, as well as the current state of affairs on the manufacturing floor, and provide the manufacturer with vital information which can be used to provide realistic delivery commitments at a competitive price.
Technology Focus
SCM can be thought of as a holistic approach to manufacturing management. In many cases, no one system can accomplish all of the functions of a full SCM solution. Many manufacturers already have one or more components of an SCM solution but lack the integration between the different components.
Components of an SCM solution fall into one or more of the following six areas:
- Product Development - Captures information on product requirements, ability of suppliers to deliver according to manufacturing requirements, product design, and testing.
- Planning - Performs sales and order forecasting, manufacturing and distribution planning, and matching future demand to available supply.
- Distribution and Logistics - Handles inventory and warehouse management, inbound/outbound transportation, order management, physical distribution, and third-party partner management.
- Purchasing - Handles the procurement of product components, standard raw materials, and customized supplies needed to manufacture the end product.
- Manufacturing - Tracks, reports and analyzes information from the shop floor.
- Business Partner Integration - Focuses on leveraging core competencies of business partners and exchange of information between the manufacturer, suppliers, and other business partners.