Tuesday, February 25, 2014

Supply Chain Network – IT works!!!!

The mantra of a successful business lies in the 3Ps – Procurement, Production and Passing onto the products/services to customer. The 3Ps can be widely evaluated on parameters like time, money, manpower etc. As we see this looks very simple, but the question is – is it?
Supply networks describes the flow of material and information over a grid of inter-linked bodies. The flow can be unidirectional or multi-directional, depending on what information or material flows. The idea is to identify and define suppliers, plants, warehouses, flow of goods from origin to final customer, while optimizing the process all the through. A company must decide how it could tackle a particular market. The strategy needs to be chalked out. How close the suppliers, plants, distribution network be to the target market. Many a times, two geographically separated, different companies combine in order to produce goods and sell it to the near market, thus bringing the cost of operation significantly down. At times, a third party logistics is involved to curtail the cost of creating a private logistics set up. And again, some go for local manufacturers to produce goods for the bigger brands.
Though, it seems that the company should and must have all this components near to the target market/customer. In real world it is quite a bit difficult. Sometimes, the cost of creating a local production unit is way too high than actually transporting the finished products from a distant location. In some other cases, the finishing of the product itself requires the intermediate products to be transported back and forth between two different locations in order to produce the final product. There is a myriad of possible scenarios. With advances in the economic conditions and increase in the demand, there is huge influx in these logistics. A survey reveals, logistics industry supports the 90% of the total market business. Now, that indeed is a real big number. Controlling such huge quantities of products and correct delivery of all of them is very critical. But, handling all of them can be daunting task indeed.
The role of technology pitches in here! Information technology is panacea for the logistics industry. Consider, manually tracking each consignment right from pick up to dispatch to delivery.  There are millions of thousands of consignment moved across the globe every day. The results of an error can be really decisive. Information technology serves a large part of the total logistics industry, especially large scale logistics. Many techniques like Radio Frequency Identifier (RFID), Global Location Number, Transport Management System (TMS), and Bar Coding etc. are brought into use on a day to day basis for the right on-time and correct dispatch and delivery of the logistics. These new techniques bring the occurrence of errors significantly down and speed up the process of tracking the exact location of the consignment. Instead of keeping voluminous records of all the transactions, the data can be stored electronically. Some consignments even have their units electronically save information of the source and destination, thereby making the chance of wrong deliveries less even if a part or a unit of the original consignment is misplaced.  As the market grows further, the need of even better and advanced technology would increase. The role of IT managers no doubt, would increase and the future. New Ideas to further make the supply chain network more streamlined is very necessary.

No doubt, IT is the solutions to all the queries of Supply Chain Network.

Ref: Information on public domain web  

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