Over the years, the significance of supply chain management (SCM) well understood by the world of business. SCM manages to establish a connection between the manufacturer, suppliers, distributors, and end-users. The supply chain management services are in practice since the year 1942, and these days lots of modifications have been done to this theory to make it relevant for this tech-savvy era. There are various types of supply chain management theories and management, which are followed by the industry.
Analysis of transaction cost
This popular theory determines whether the goods are bought at a low price and sold at a high price or not. TCA helps to find out the better price at which the product or materials can be purchased and sold.
Coordination with Channels
With the help of supply chain management, channel coordination is done effectively so that the process can meet the requirement of the customers. SCM makes an effective synchronization between the supplier, transportation, manufacturer, and retailers. Many SCM companies are managing multiple businesses, and the target is to coordinate well for an individual business, to reduce overall costs with time-saving.
Material logistic management
Raw materials require proper planning, sourcing, distribution, storage, etc, and these can be done simply, with the help of an accounting & inventory Management system. Here the 3PL methodology is effectively used to ensure that receiving of the materials within time to manufacture the final product. This methodology is best applicable to the e-commerce business.
Planning for material requirement
This theory helps to determine the lowest possible inventory of material devoid of affecting the production process. This will prevent a business from excess purchasing and storing of raw materials and automatically warehousing costs will get reduced.
Theory of constraints
In the supply chain, this theory plays a vital role. This theory will determine whether there is any constraint that creates hindrances to the flow of production in the business or not. Here at first, the constraint is identified, which is creating hindrances in the process. Then a solution is found to remove the constraints.
Total Quality Management
Total quality management, targets towards streamlining of the complete supply chain process. It includes all aspects, from the start, to finish, which may include giving training to employees and ensuring satisfaction for customers via reverse logistics.
It is not the end of the list as there are many more methods and theories which are used by supply chain management companies. To get better guidance in this regard, seek the assistance of the experts of the Worxpertise team.
