People often talk about supply chain strategy to cope up with the ever changing trends and expectation of market. sometimes we are so carried away in strategizing that we ignore the operational level processes involved in the supply chain, which results in unexpected inefficiences in the system. hence it becomes paramount for the supply chain professional, who is fresh in corporate world to have atleast a broad overview of different supply chain processes, which will furthur help in alligning any supply strategy in better fasion. keeping in mind, this paper focuses upon broad processes of suply chain in manufacturing industry.
Supply chain process inside a manufacturing company start from receiving a customerpurchase order, subsequently requisite raw material in desired quantity is arranged as per the production plan of manufacturing , after which it is packed and dispatched.
This is explained with the help of the various steps.
1. Customer purxhase order input in the ERP system-: once the sale department gets the customer purchase order, they varify if prices, payment terms, specification of the product are as per the prio agreement with the customer. If everything is ok then these details are entered in the ERP system, which furthur becomes an input to production planning department as what is to be made and in what quantity. Based on this input production planning department does the raw material planning. Entereing customer purchase order in EPR is a very critical process, since any wrong input at this stage will lead to erroneous information to production planning department, as a result erroneous raw material planning will happen resulting in procurement of raw material, which is actually not required and due to this inventory will start piling up.
2. MRP: Material requirement planning is done based on the customer purhase order entered by sales department in ERP system.
In this process, bill of material of the products for which the planning is done is exploded to identify which raw material is required. Net quantity of the raw material to be prequired is calculated after considering raw material.
3.Release of purchase requisitions- Based on calculation during MRP,purchase requisitions are released by the production planning department containing the details of part number, quantity to be procured and the dates at which the raw material is required in the factory.
4.Release of Purchase order on Vendors: Based on the purchase requisitions released , Procuement department sends request for quotations to the vendor. The request for RFQ is compiled , negotiated with vendor are done and best offers are idetified.
5.Raw material received in factory: It is at this point where the raw material is inspected for quality and observed whether it is meeting the desired specification. if this process is not followed strictly, then inferior quality raw material will get in factory which will hamper the quality of finished product.
Also a unique storage space is assigned to the raw material, which enables easy identification and retreval of the raw material.
6. Manufacturing: Important thing is to manufacture the product as per the specification but also important is to manufacture the product at the time when it is required. Hence manufacturing needs a close coordination with the production planning department to make sure that the product manufacturing dates meets the date as per the production plan.
7. Dispatch: After the goods are been manufactured, they are inpected and dispatched, During dispatch it should be ensured that invoising of the finished product is happening as per the taxes and duties as agreed with customers. Also it is ensured that all relevant documents are placed accordingly.
Tough the above process is fairly easy to understand and follow but there are lot many operational issues which arise during executing these issues which arise during executing these processes.