Design Considerations for Typical Supply Chain planning

Design Considerations for an effective supply chain system

Typical Supply Chain planning :

A typical supply chain consists of staging, packing and shipping to the customers. These functions in many evolved organizations are handled through supply chain systems through work flow driven processes. There is a tendency to continue with the operations as long as the orders are getting fulfilled within the contractual time frame. However, as the organizations grow the existing systems and processes which have been defined in the early stages may face the issues of scaling up to the new fulfillment obligations. This is partly because analytics capability is not inherent in some systems as they were not designed to be so in the first place.

For any supply chain to be effective instead of just being a fulfillment engine it must also include the features of forecasting i.e. supply and demand analysis, and optimizing shipping features among others. The challenge is to include these functions during the design for a startup organization/s as many inputs like inventory/stocking capabilities, future demand and geographies will at most be sketchy although these might well be included in the overall business plan and roll out schedules.

Inputs for Design:

Factoring the existing stocking capabilities i.e. warehouse disposition and future planned product lines.

Evaluate the pros and cons of centralized shipping vs localizing it in the operational territories i.e. corporate function vs organizational.

Have a system of checks so that any drop in inventory levels will trigger an alert to the shipping system so that available to promise dates and order quantities can be adjusted accordingly.

Evaluation of FOB terms and conditions and planning for preferred shipping carriers in relation to the most frequently used FOB can be undertaken.

Provision for simulating the supply chain system for different scenarios like holiday season and lean season i.e. stress testing should be built in the system so that optimum inventory levels can be arrived at for different periods.

Ability to generate inventory physical count and valuation on a periodical basis or on-demand so that overheads with respect to maintaining the inventory can be minimized.

Real time integration of Proof of Delivery with the fulfillment engine so that the customer operations can have up to date information.

Ability to recognize revenue at various levels depending on the contractual and payment terms. Ex: Order confirmation, completion of shipping or on receipt of delivery.

Ability to incorporate the various tax regimes structures and be able to calculate the tax components on the items shipped intrinsically. Ex: Sales, VAT etc.

Few more things that one can considered while designing Supply Chain planning. Medium and large scale industries are required supply chain management not only it help in avoiding unwanted situations, but also also very useful for implementing other planning like Demand Planning, Inventory Planning & Sales and Operations Planning (s&op). Business owner  must opt for perfect supply chain solutions.