Previously, we have seen that there are two types of flows that exist in the supply chain, i.e. the “physical flow” and the “information flow”. Here’s an outline about the functions of the two flows:
- Physical flow or goods/material flow is to ensure the right types of goods/materials, in the right quantities, and to the right quality are meet the requirement of customers. Activities in this flow are buying, making and moving.
- Information flow is to find what are the goods/materials needed by customer, what quantities are required, when and where are they required.
All the activities involved in the supply chain are to respond to this information.
We also have seen that there are five basic components of the supply chain management, i.e. plan, source, make, deliver, and reverse. From these five basic components, in general we can see there are three important things involves in the supply chain:
- Procurement and Order Management. Source of goods/materials is key information for companies to meet the needs. From this information then we can make a further planning for delivery of goods to the customers/buyers.
- Transport. Transport is an important component that ensures goods/materials are moved efficiently in the right speed to meet the needs of customers/buyers.
- Warehousing and Inventory. These components are also a key component of the supply chain process. By warehousing, any inventory is being stored in the supply chain process.
Improving supply chain is about ensuring the flow of goods/materials and the flow of information is as effective and efficient as possible and removing any barriers there may be affected to those flows.
Below some ideas for improving the performance of the supply chain:
- Improve and increase communication between all units in the companies (internal) and all agencies/companies involved in the supply chain process (external). Lack of communication either internal or external may raise some problems in providing the needs to the customers/buyers. Sharing information also includes in this point. By sharing related information to other colleagues will help companies to meet the needs. Sometimes people kept latest information only for them or their unit to get applause from the management. But applause will be given only if the work is done well. If it is failed then we will blame each other. We also need to give correct information in order to avoid any problem. It is always better to double check the information before pass it to other.
- Improve coordination and manage all links in the supply chain in properly manner. This includes improving the knowledge of people involved on the supply chain process.
- Reporting. Good and clear reports as well as correct data are needed. For example, by creating a new database related to the movement of goods/materials from the sources until the customers/buyers. All related information such as procurement, storage, warehousing, and transport to be updated on daily basis.