Supply Chain Management
Supply chain management is the coordination of efforts of a network of vendors that provides materials and components for a company's products. Supply chain management primarily takes place in manufacturing companies such as Chrysler, Sony, and Boeing. Of course, no two companies operate the same way, so supply chain management practices vary greatly even for companies in the same industry. For example, a company at the cutting edge of technology tends to look for a supply chain that has very short lead times (the time to make and deliver a product), whereas a company whose products have many competitors needs a supply chain that focuses on cost reduction.
A simple definition of supply chain is the network of vendors that provides materials for a company's products, but in reality, the supply chain is more complicated. There is a stream of flows from supplier to supplier until a product reaches an end user. For example, oil is rigged from the ground, sent to a refinery, plastic is made, an injection molding shop buys plastic pellets, makes plastics components, ships the components to a customer, the customer assembles the plastic parts into their machine, and then sells the machine to their customer. The further away from the customer, the farther "upstream" a supplier is considered to be.
The network of vendors in a supply chain often includes tiered suppliers (meaning a company does not receive materials directly from the supplier, but is involved in getting materials or parts from an upstream supplier to a downstream supplier). The more complex a product, the more significant the upstream supplier's roles are. From a supply chain manager's perspective, his suppliers are primarily responsible for managing their own supply chain but he should have some involvement.
Oftentimes, a manufacturing facility acts as a supplier to a downstream manufacturing facility. For example, a company could have their manufacturing plant in the U.S. and their assembly plant in Mexico. The U.S. plant would be considered an internal supplier, since it's part of the same company. The transportation of materials throughout the supply chain is often called logistics. This includes air, land, and sea shipping as well as customs processing to allow materials to cross borders. The supply chain does not end until the product reaches the consumer. For this reason, distribution centers, distributors, and wholesalers are all part of the supply chain. It is not rare for a supply chain to involve a dozen parties.
Below are brief summaries of the duties for supply chain management occupations. Not every organization will have all of these positions and the duties of the positions will not be limited to those described here.
Buyer: Buyers do purchasing just like supply chain managers. The difference is that supply chain managers buy parts and materials for the company's products, whereas buyers purchase everything else. Some examples of items that buyers procure are desktop computers, office supplies, and hand tools.
Planner: A planner takes the forecast from marketing/sales and breaks that into a build schedule of what products should be built and when they should be built to meet inventory goals. Planners also work with supply chain managers to control inventory of parts and materials.
Logistics Manager: A logistics manager is responsible for the traffic of goods coming to and going from the factory. This encompasses air, land, and ocean traffic, both domestic and international.
Supply Chain Engineer: A supply chain engineer works on technical issues with the supplier. This involves working with suppliers to improve their quality, helping them to analyze failures, and developing new products.
Commodity Manager: A commodity manager is similar to a supply chain manager. Some companies separate the ownership of parts and materials for the supply chain managers by product line.
Receiving Inspector: A receiving inspector is responsible for checking the quality of the parts and materials that come from the vendor before they get moved to the production floor for consumption and before the supplier gets paid.
Procurement Manager: A procurement manager is in charge of the buyers and supply chain managers. The procurement manager sets the goals for the department and provides a level of escalation when a supply chain manager is having trouble managing a supplier.
Receiving Coordinator: The receiving coordinator processes the parts and materials delivered. This includes doing a receiving transaction in ERP, moving the parts to their location, and making sure the paperwork the supplier sends matches what was received.
Receiving Supervisor: The receiving supervisor is responsible for the receiving department. Besides supervising receiving department workers, the receiving supervisor is in charge of creating and improving department processes.
Accounts Payable Coordinator: The accounts payable coordinator works in the accounting department and processes the invoices from the suppliers. After verifying the invoices match what was actually received, the accounts payable coordinator sends a payment to the supplier.
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