MT558

Supply Chain Management

By Dr. Gaurav Abhishek Tigga
Module 1 : Introduction to Supply Chain
Management
•Concepts
•Objectives
•Information and Material flow in the Supply Chain
•Supply Chain Planning
•Supply Chain Decision Making
•Benefits of Supply Chain Management in Industry.
What is supply chain?
• “SC is the alignment of firms that bring products or services to
market.” – Lambert, Stock and Ellram
• “SC consists of all parties involved, directly or indirectly, in fulfilling a
customer request. SC includes manufacturers suppliers, transporters
(logistics), warehouses, retailers and customers.” – Chopra and Meindl
• SC includes all functions involved in receiving an filling a customer
request : new product development, marketing, operations,
distribution, finance, customer service, etc.
Information and material flow in the Supply
Chain
• Supply chain management can be defined as a systematic flow of
materials, goods, and related information among suppliers,
companies, retailers, and consumers.
• Types
• There are three different types of flow in supply chain management −
• Material flow
• Information/Data flow
• Money flow
Material Flow
• Material flow includes a smooth flow of an item from the producer to the consumer.
This is possible through various warehouses among distributors, dealers and retailers.

• The main challenge we face is in ensuring that the material flows as inventory quickly
without any stoppage through different points in the chain. The quicker it moves, the
better it is for the enterprise, as it minimizes the cash cycle.

• The item can also flow from the consumer to the producer for any kind of repairs, or
exchange for an end of life material. Finally, completed goods flow from customers to
their consumers through different agencies. A process known as 3PL is in place in this
scenario. There is also an internal flow within the customer company
Information Flow
• Information/data flow comprises the request for quotation, purchase
order, monthly schedules, engineering change requests, quality complaints
and reports on supplier performance from customer side to the supplier.
• From the producer’s side to the consumer’s side, the information flow
consists of the presentation of the company, offer, confirmation of
purchase order, reports on action taken on deviation, dispatch details,
report on inventory, invoices, etc.
• For a successful supply chain, regular interaction is necessary between the
producer and the consumer. In many instances, we can see that other
partners like distributors, dealers, retailers, logistic service providers
participate in the information network.
Money Flow
• On the basis of the invoice raised by the producer, the clients examine
the order for correctness. If the claims are correct, money flows from
the clients to the respective producer. Flow of money is also observed
from the producer side to the clients in the form of debit notes.
• In short, to achieve an efficient and effective supply chain, it is
essential to manage all three flows properly with minimal efforts. It is
a difficult task for a supply chain manager to identify which
information is critical for decision-making. Therefore, he or she would
prefer to have the visibility of all flows on the click of a button.
Supply chain
What is supply chain management?
• SCM can be defined as the management of flow of products and
services, which begins from the origin of products and ends at the
product’s consumption. It also comprises movement and storage of
raw materials that are involved in work in progress, inventory and
fully furnished goods.
Concepts
• Supply chain management is a process used by companies to ensure
that their supply chain is efficient and cost-effective.
• A supply chain is the collection of steps that a company takes to
transform raw materials into a final product.
• The five basic components of supply chain management are
• Plan
• Develop
• Make
• Deliver
• Return
Plan
• The initial stage of the supply chain process is the planning stage.
• We need to develop a plan or strategy in order to address how the
products and services will satisfy the demands and necessities of the
customers.
• In this stage, the planning should mainly focus on designing a strategy
that yields maximum profit.
• For managing all the resources required for designing products and
providing services, a strategy has to be designed by the companies.
• Supply chain management mainly focuses on planning and developing
a set of metrics.
Develop(Source)
• After planning, the next step involves developing or sourcing.
• In this stage, we mainly concentrate on building a strong relationship with
suppliers of the raw materials required for production.
• This involves not only identifying dependable suppliers but also determining
different planning methods for shipping, delivery, and payment of the
product.
• Companies need to select suppliers to deliver the items and services they
require to develop their product.
• So in this stage, the supply chain managers need to construct a set of pricing,
delivery and payment processes with suppliers and also create the metrics for
controlling and improving the relationships.
Make
• The third step in the supply chain management process is the
manufacturing or making of products that were demanded by the
customer.
• In this stage, the products are designed, produced, tested, packaged, and
synchronized for delivery.
• Here, the task of the supply chain manager is to schedule all the activities
required for manufacturing, testing, packaging and preparation for delivery.
• This stage is considered as the most metric-intensive unit of the supply
chain, where firms can gauge the quality levels, production output and
worker productivity.
Deliver
• The fourth stage is the delivery stage.
• Here the products are delivered to the customer at the destined
location by the supplier.
• This stage is basically the logistics phase, where customer orders are
accepted and delivery of the goods is planned.
• The delivery stage is often referred as logistics, where firms
collaborate for the receipt of orders from customers, establish a
network of warehouses, pick carriers to deliver products to customers
and set up an invoicing system to receive payments.
Return
• The last and final stage of supply chain management is referred as the
return. In the stage, defective or damaged goods are returned to the
supplier by the customer. Here, the companies need to deal with
customer queries and respond to their complaints etc.
• This stage often tends to be a problematic section of the supply chain
for many companies. The planners of supply chain need to discover a
responsive and flexible network for accepting damaged, defective and
extra products back from their customers and facilitating the return
process for customers who have issues with delivered products.
Objectives of supply chain management
• Objective of every supply chain should be to maximize the overall value
generated.
• Value a SC generates is the difference between what the final product is
worth to the customer and the costs the supply chain incurs in filling the
customer’s request.
• The goal/mission of SCM can be defined as increasing the output while
simultaneously reducing both inventory and operating expense.
• The main objective of SCM is to monitor and relate production, distribution,
and shipment of products and services. This can be done by companies with
a very good and tight hold over internal inventories, production,
distribution, internal productions and sales.
Objectives of supply chain management
• SC profitability or surplus
• is the difference between the revenue generated from the customer and the overall
cost across the SC.
• is the total profit shared across all supply chain stages and intermediaries.
• The higher the SC profitability , the more successful is the SC.
• SC success should be measured in terms of SC profitability rather than the
profitability at individual stages.
• Effective SCM involves the management of SC assets and products,
information, and fund flows to maximize the total SC profitability.
• All the information, product, or funds generate costs within the SC and their
efficient management is key to a SC’s success.
Important goals of supply chain management
• Supply chain partners work collaboratively at different
levels to maximize resource productivity, construct
standardized processes, remove duplicate efforts.
• Minimization of supply chain expenses is very essential,
especially when there are economic uncertainties in
companies regarding their wish to conserve capital.
• Cost efficient and cheap products are necessary, but
supply chain managers need to concentrate on value
creation for their customers.
• Exceeding the customers’ expectations on a regular
basis is the best way to satisfy them.
Important goals of supply chain management
• Increased expectations of clients for higher product variety,
customized goods, off-season availability of inventory and rapid
fulfillment at a cost comparable to in-store offerings should be
matched.
• Lastly, supply chain management aims at contributing to the financial
success of an enterprise.
• It also aims at leading enterprises using the supply chain to improve
differentiation, increase sales, and penetrate new markets. The
objective is to drive competitive benefit and shareholder value.
Key benefits of supply chain management
• Develops better customer relationship and service.
• Creates better delivery mechanisms for products and services in demand with minimum delay.
• Improvises productivity and business functions.
• Minimizes warehouse and transportation costs.
• Minimizes direct and indirect costs.
• Assists in achieving shipping of right products to the right place at the right time.
• Enhances inventory management, supporting the successful execution of just-in-time stock
models.
• Assists companies in adapting to the challenges of globalization, economic upheaval, expanding
consumer expectations, and related differences.
• Assists companies in minimizing waste, driving out costs, and achieving efficiencies throughout
the supply chain process.
Benefits of supply chain management in
industry
1. Higher Efficiency Rate:
2. Decrease Cost Effects:
•
3. Increases Output:
4. Increases Your Business Profit Level:
• When you place your business open to new technologies and
improved collaboration within the different areas, you can be sure
that this will ultimately increase your business profit level.
Benefits of supply chain management in
industry
5. Boost Cooperation Level:
6. No More Delays In Processes:
• The benefits of supply chain management include the fact that
through communication, you can actually lower any delays in
processes
• 7. Enhanced Supply Chain Network:
• The supply chain strategic planning and combining all the information
gathered on the different sectors of your business will allow you to
have an enhanced supply chain network.
Benefits of supply chain management in
industry
1. Better collaboration with suppliers
2. Better quality control
3. Shipping optimisation
4. Reduced inventory and overhead costs
5. Improved risk mitigation
6. Stronger cash flow
7. A more agile business
8. Better visibility and data analytics
Supply chain Planning
• Supply chain planning is the process of anticipating demand and planning materials and
components to supply that demand, along with production, marketing, distribution, and
sales.
• It ensures that all parts of the organization, from materials purchasing, operation scheduling, to
shipping and delivery are working together.
• Supply chain planning is a part of supply management that coordinates assets to optimize
the delivery of goods, services, and all information flowing from a supplier to a customer
while balancing supply and demand.
• Supply chain planning is an intricate process that requires coordination, visibility, and
synchronization of multiple departments and components of the supply chain.
• With proper supply chain planning, you will be on you way to improve your operations and eliminate
delays in delivery.
• Without a comprehensive plan, facilities may fail at order fulfillment and production facility suffers
when the first unforeseen hurdle arrives.
Supply chain Planning
Supply Chain Planning strategies and methods include:
• Demand Planning
• Demand planning lays the foundation of subsequent supply chain processes.
• This involves an assessment of varied data to accurately forecast demand, which can then be used to
maintain and store optimum inventory and avoid costs associated with surpluses. Demand planning is done
by looking at historical data, projected sales, market conditions and other factors.
• Today, demand planning is done with the help of advanced technology.
• Powered by artificial intelligence and machine learning capabilities, advanced supply chain management
software can predict demand with precision. It can ‘sense’ demand by looking at real-time data, market
conditions and events and point-of-sale data.
• Supply Planning
• The next step is to come up with a supply plan that can synchronize with the demand plan and meet the
overall requirements of the business.
• The supply plan involves sourcing of raw materials, components and other goods needed for production.
• The goal is planning supply that can meet the demand for the product in the best possible way.
Supply chain Planning
Supply Chain Planning strategies and methods include:
• Production Planning:
• This involves resource allocation of employees, material and production capacity.
• The broad objectives of a production plan are reducing waste and only producing
what is required to ensure the availability of optimum inventory.
• Sales and Operations Planning (S&OP)
• Often conducted once a month, sales and operations planning essentially brings
diverse business teams working with different objectives on the same page.
• It helps sales and marketing leaders assess and merge their plans with operations.
• The all-party meet of different teams aids in the coordination of supply assets and
capabilities to meet demand requirements for the short and long term.
Supply chain Planning
Supply Chain Planning Strategies and Methods
These are some of the supply chain planning strategies and methods that are employed by organizations to enable
a seamless, thorough supply chain:
• Data Gathering
• Real-time data with precise figures and information allow for deep insights into the supply chain, enabling quick decision-making.
• Lean Principles
• With a supply management system based on the just-in-time concept, management can reduce inventory costs.
• Orders are fulfilled faster and overhead costs are reduced. This makes way for a smooth inventory flow.
• Heightened Visibility
• Every supply chain runs the risk of accidents resulting in waste. With better operational visibility, the amount of inventory loss can
be reduced.
• Standardization
• With an enterprise resource system that enables higher efficiency, the supply chain enhances its revenue streams in the long and
short run.
• With a planning system, identifying software that is easy to understand for the team encourages better collaboration and reduces
the chances of future mistakes.
Supply chain Planning
Benefits of Supply Chain Planning:
With an effective supply chain planning system in place, a business can enjoy several benefits that can enhance its
competitive edge. Some of these benefits may include:
• Reduction in Costs
• There are several crucial areas where a business can enable reduced costs. Lower costs can result in:
• Enhanced inventory system.
• Optimized stocking space for ready products, removing the chances of damage or resource deterioration.
• Improved system responses to customer needs.
• Improved Efficiency
• When a business develops the capacity to incorporate supply chains, creative product strategies, and integrated logistics, it puts
the organization in a better position to predict demand and take the right actions. This is the biggest benefit.
• When an organization has a robust supply chain in place, it can deal with a dynamic market and adjust itself accordingly with no
constant micro-management or extra analysis.
• Increased Output
• With an improvement in supply chain systems, communication is also better.
• This improvement leads to enhanced coordination and collaboration between companies that manage shipments and
transportation, including vendors and suppliers.
Supply Chain Planning
• Benefits of Supply Chain Planning
• Better Cooperation
• Successful businesses usually have superior communication. With a lack of clear communication, the business’s
vendors, distributors, and employees may not be able to understand your plans clearly.
• Supply chain planning results in better communication between all entities, and this results in better cooperation.
Technology has enabled communication channels to be open even in remote working environments or multiple
international offices and time zones.
• Increased Profits
• When businesses open up to high-end technology and implement better collaboration in all areas, efficiency and
productivity are improved, leading to higher profit levels.
• Enhanced Supply Chain Network
• Introducing a mix of lean practices such as stock control or waste reduction helps create a continuous improvement
system. Data from multiple areas of business enhances your company's supply chain network.
• Reduce Delays
• A well-planned communication system can reduce delays in supply chain processes. With every person in the system
understanding their role in the business accurately, several production line issues can be mitigated.
Supply Chain Planning
• Supply chain planning is a process that involves identifying, measuring, and managing the various components of a company’s supply chain.
Benefits of Supply Chain Planning:
• It helps companies to create efficient supply chains that allow them to meet customer demand while minimizing risk.
• One of the main benefits of supply chain planning is that it allows companies to minimize losses by reducing delays and delays in shipment.
• By identifying potential issues early on, supply chain planners can fix problems before they become big issues. This can help companies to
avoid costly disruptions and lower the risk of losing customers.
• There are a number of benefits to supply chain planning, including:
• Optimization of resource allocation to ensure optimal use of available resources;
• Increased predictability and transparency of operations;
• Reduction in inventory levels, which can save money;
• Reduction in the risk of disruptions due to the supplier or product shortages;
• Increased efficiency;
• Improved customer satisfaction; and;
• Improved safety of operations.
• With all these benefits, it’s clear that supply chain planning is an essential part of any organization’s strategy.
Supply chain planning
Challenges in Supply Chain Management
• There are three common pitfalls to supply chain planning. These issues are
usually seen in the supply chain management system in general; they also apply
to the sub-categories, such as planning.
• The first issue is a minimal organizational commitment to planning development. It’s often difficult to
get the multiple stakeholders of a business process onto the same platform.
• Another problem is poor collaborative efforts among various functions, which leads to hurdles in plan
creation.
• When evaluating for supply chain planning, companies tend to look at historical data that is collected
from within their systems. However, there is a lot more dynamic data available that can help companies
be better prepared and streamline their functioning.
• Achieving optimal supply chain planning is not easy, but it is integral to helping a business grow. As with
every system, there can be some pitfalls and challenges that will need to be addressed. Smart
workarounds can help businesses create the perfect supply chain planning system.
Supply chain decision making
• DMADV is a 5 step methodology for solving problems, with each letter representing a step in the process.
• D – DEFINE: The first step in making a decision or solving a problem is to define it. This first step is one of
the most critical steps. You have to accurately and adequately define the constraints, the current
operations, and the goals. If you spend the time upfront defining the requirements and constraints, you’ll
be able to determine whether or not the solution/decision is the right one. Learn more about step 1.
• M – MEASURE: The second step in making a decision or solving a problem is to measure. In this case, we
want to measure the current operations. By measuring the current operations, we’ll have something to
compare our solution against. If the solution doesn’t improve the current operations, by providing
increased capacity/throughput, improving efficiency, or improving safety for example, then it might not be
the right choice. Learn more about step 2.
• A – ANALYZE: The third step in making a decision or solving a problem is to analyze the data. We gathered
all the data in the previous step, but now we need to get it into a meaningful format. There are many
different ways to analyze and format the data, but some of the typical things we look for in the data are
things like order profiles, order types and patterns, seasonality, etc. Learn more about step 3.
Supply chain decision making
• D – DESIGN: Design and test the product, service or process.
• V – VALIDATE: The final step in making a decision or solving a problem is to validate the preferred design
option. Before you pull the trigger on the decision, you want to know if it’s going to actually solve the
problem. To help validate the preferred option, we can run Excel simulations or even model the system in
one of the simulation packages we use such as Demo 3D. If we create a simulation, you’ll be able to see your
system and test different worse-case scenarios. Learn more about step 5.
• Why do we use it? And does it work?
• Now that you know what DMADV is, you might be wondering why we use it. By following these five steps each time
we encounter a problem, we’re ensuring that we’ve fully identified the issues and our solutions will actually meet
your needs and help solve the issues you’re having with your supply chain or warehouse. But, does it work? There’s a
reason we call it our proven methodology.
• We’ve used it in our engineering studies for years. Every time we use this methodology, we’re able to make an
informed recommendation and help you make an informed decision.
Supply Chain Decision Phases
• Decision phases can be defined as the different stages involved in
supply chain management for taking an action or decision related to
some product or services. Successful supply chain management
requires decisions on the flow of information, product, and funds that
fall into three decision phases.
• The three main decision phases involved in the entire process of
supply chain are :
• Supply Chain Strategy
• Supply Chain Planning
• Supply Chain Operations
Supply Chain Decision Phases
• Supply Chain Strategy
• In this phase, decision is taken by the management mostly.
• The decision to be made considers the sections like long term prediction and involves price of goods that are very
expensive if it goes wrong.
• It is very important to study the market conditions at this stage.
• These decisions consider the prevailing and future conditions of the market.
• They comprise the structural layout of supply chain. After the layout is prepared, the tasks and duties of each is laid out.
• All the strategic decisions are taken by the higher authority or the senior management.
• These decisions include deciding manufacturing the material, factory location, which should be easy for transporters to
load material and to dispatch at their mentioned location, location of warehouses for storage of completed product or
goods and many more.
• There are some strategic decisions that a company should decide.
• In-house vs. outsource – managing order, subcontracting
• Location &capacities – production cost plus warehouse
• Transportation networking
• Strategic change – brick mortar vs. online
• Strategic change = supply chain surplus
Supply Chain Strategy?
• The goal of any supply chain strategy should be to create a plan that outlines how the company
will get its products or services to market.
• The main objective is to minimize costs and optimize customer service levels.
• The decision made in the supply chain strategy should be aligned with future business goals.
• The strategic plan will also take into account any company’s competitive advantages.
• There are plenty of supply chain strategies, but most can be boiled down to a few key elements.
• Key elements of SC strategy

Cost Sustainability
Delivery Time Reachability
Quality Customer Satisfaction
Flexibility
Supply Chain Decision Phases
• Supply Chain Planning
• Supply chain planning should be done according to the demand and supply view.
• In order to understand customers’ demands, a market research should be done.
• The second thing to consider is awareness and updated information about the competitors and strategies
used by them to satisfy their customer demands and requirements.
• Different markets have different demands and should be dealt with a different approach.
• This phase includes it all, starting from predicting the market demand to which market will be provided the
finished goods to which plant is planned in this stage.
• All the participants or employees involved with the company should make efforts to make the entire process
as flexible as they can.
• A supply chain design phase is considered successful if it performs well in short-term planning.
• Planning includes subcontracting of manufacturing, inventory policies, timing, and size of marketing and price
promotions.
• Demand forecasting
• Procurement planning and control
• Production planning and control
Supply Chain Decision Phases
• Supply Chain Operations
• The third and last decision phase consists of the various functional decisions that are to be made instantly within
minutes, hours or days.
• The objective behind this decisional phase is minimizing uncertainty and performance optimization.
• Starting from handling the customer order to supplying the customer with that product, everything is included in this
phase.
• For example, imagine a customer demanding an item manufactured by your company. Initially, the marketing
department is responsible for taking the order and forwarding it to production department and inventory department.
The production department then responds to the customer demand by sending the demanded item to the warehouse
through a proper medium and the distributor sends it to the customer within a time frame.
• All the departments engaged in this process need to work with an aim of improving the performance and minimizing
uncertainty.
• During this phase, companies do-
• Inventory management
• Transportation management
• Customer order processing
• Relationship management
Decision-Making Skills for Supply Chain
Management Professionals
• The decision-making process for supply chain management is complex and
involves multiple people across multiple teams.
• When employers look for someone to oversee supply chain management,
effective decision-making is high on the list of desired qualifications.
• A manager in the global supply chain need to hone their problem-solving
skills.
• An effective decision-making process is the best defense against the unknown
for any organization.
• Many companies look to their supply chain management professionals to
design and implement decision-making processes that will keep the
organization one step ahead in an ever-changing world.
Tools for effective decision-making in supply
chain management
THE RATIONAL DECISION-MAKING MODEL
• Applied a modified version of the rational decision-making process to a supply chain management
case study.
• The steps of the rational decision-making model are:
• 1. Identify the problem or opportunity.
• 2. Identify potential solutions.
• 3. Do a gap analysis to explore the work needed to bridge the gap between where you are now and arrival at your
desired solution.
• 4. Gather data and explore alternative solutions.
• 5. Analyze possible outcomes.
• 6. Choose the best solution for your situation.
• 7. Put your decision into action.
• The rational decision-making process is an advanced process that can help develop both long-term
goals and solve short-term problems. It provides a defined set of steps to follow to make sure you
have considered all the options and ramifications of various choices.
Tools for effective decision-making in supply
chain management
PARETO ANALYSIS
• The Pareto Principle, which essentially states that 20% of your clients account for 80% of your
profits, is named after the Italian economist Vilfredo Pareto. It is also known as the 80/20 rule.
• A Pareto analysis takes the 80/20 principle and applies it to decision-making.
• The value of a Pareto analysis in supply chain management is that it allows you to separate the
important influences from the clutter.
• If multiple factors have led to a problem in the manufacturing segment of your supply chain, for
example, you would quantify the amount that each factor contributes to the issue. You are likely
to find that 20% of the factors cause 80% of the problem.
• This helps clarify your decision-making process, so you can focus on the most important factors
first.
• You spend your energy on fixing the issues that will do the most to change the situation while
you save the effort changing elements that would have only a minor impact.
Tools for effective decision-making in supply
chain management
SWOT ANALYSIS
• SWOT stands for Strengths, Weaknesses, Opportunities, Threats.
• A SWOT analysis is a simple process for effective decision-making that helps you outline the pros and cons of the
situation.
• To perform a SWOT analysis, create a chart with two columns and two rows. In the first square, list your company’s
strengths. In the second, list weaknesses. On the bottom row, list opportunities and threats. By putting these
factors down on paper in this simple format, you can quickly spot pitfalls and opportunities to guide you in your
problem-solving process.

PEST ANALYSIS
• The PEST analysis is another tool that lends itself to visual mapping for decision-making.
• The acronym stands for Political, Economic, Social, Technology.
• This tool can help you make decisions about a supply chain based on external factors.
• Since most supply chains involve external partners and many cross geo-political borders, the PEST analysis is
particularly useful for setting long-term goals in supply chain management.
Tools for effective decision-making in supply
chain management
DECISION TREE
• Another visual mapping tool for decision-making, the decision tree, can be helpful in predicting
outcomes and weighing pros and cons.
• To create a decision tree, write the situation at the top or the left side of a piece of paper. Then
draw branches to represent different factors relating to the situation and their effects.
• Each branch may lead to additional branches representing different factors, decision points, or
consequences.
• This is a flexible and easy-to-use tool to help supply chain managers with the problem-solving
process.
Decision-making skills for professionals
overseeing a global supply chain
• The ability to identify problems in the supply chain
• The best supply chain professionals can spot potential problems before they arise and take
action before they cause a major rupture in the supply chain.
• Since it’s not possible to see every problem in advance, a manager also need to be able to
define problems in real time, then quickly formulate and implement solutions.
• The ability to develop and communicate solutions
• As a supply chain leader in the organization, you not only need to develop solutions to problems
that arise, but also communicate changes in supply chain operations to all parties involved.
• That may mean informing and educating your team members on changes to the process.
• It can also mean coordinating with outside suppliers in manufacturing, transportation or
warehousing.
• The managers aptitude for clearly communicating your decisions is a key asset to your role in
supply chain management.
Decision-making skills for professionals
overseeing a global supply chain
• The ability to identify trends and opportunities for greater efficiency, quality and cost
savings
• Supply chains are dynamic and your leadership and decision-making process should be as well.
• Rather than waiting for a challenging situation to arise, keep an eye on trends in supply chain
management to make sure you’re aware of current best practices.
• If you can spot opportunities to improve supply chain operations and create plans to take
advantage of those opportunities, your team can behave proactively rather than responding
reactively.
• The ability to leverage data and technology to analyze problems and opportunities in
the supply chain
• Data is your friend in supply chain management.
• When your decision-making process is based on good data, you’re able to make better choices.
• Supply chain leaders need to stay abreast of the latest software innovations that can improve job
performance and help ensure that supply chains run seamlessly.
Decision-making skills for professionals
overseeing a global supply chain
• The ability to generate or source the data you need to make well-informed decisions
• Data collection is a key asset for effective decision-making and for developing long-term goals.
• You’ll want to set up systems that consistently collect and analyze data on the performance of
various elements in your supply chain.
• Accurate and up-to-date information is crucial to the problem-solving process and effective
allocation of team resources.
• The ability to incorporate legal and regulatory considerations into your decision
making
• Supply chain management is affected by numerous factors outside your operations and often
outside your control.
• As a top supply chain management professional, part of your job is to stay informed about potential
and actual changes to the legal and regulatory framework within which each supply chain function.
• Your long-term goals need to account for actual and potential legal and regulatory developments so
your operations are ready to adapt to them.
Decision-making skills for professionals
overseeing a global supply chain
• The ability to synthesize ideas generated by a team and put them into action
• Your team is a key asset to your decision-making process, if you know how to use it.
• The leadership to elicit ideas from your team, to develop the best ideas into actionable plans, and to get all
team members on board with operational changes are high-level skills that will be appreciated by your
colleagues.
• The ability to elicit collaboration from external elements in a supply chain
• Your internal team members aren’t the only piece of the puzzle.
• As a supply chain professional, your skill at effectively communicating and collaborating
with manufacturers, freight carriers, and fulfillment service providers is important to your
success in management.
• People at every stage of a supply chain can be resources to help you with problem-solving
and implementing your decisions.
• Leverage your experience with third-party partners to create a more robust supply chain
for your organization.
Decision-making skills for professionals
overseeing a global supply chain
• The ability to recognize the relative importance of competing priorities
• Supply chain managers are called upon to address more problems than they have time to resolve.
• That is why prioritizing is so essential to making decisions in supply chain management.
• You’ll have to assign relative value to competing factors in your problem-solving process. The
expertise to juggle all the elements of a complex supply chain when you are weighing the pros and
cons of a decision is an essential skill as a leader.
• The ability to leverage information from past successes and failures to guide future
supply chain management decisions
• A clear-eyed assessment of past failures as well as successes will help you make better-informed
decisions about the future.
• It’s the key advantage of experience, and will serve your team well the better you are able to draw
from your professional history.
• But it’s important to track problems at every level of the supply chain, even those that can be fixed
in the moment, so you can take steps to prevent the same issues from arising again.
Decision-making skills for professionals
overseeing a global supply chain
• The ability to build uncertainty and contingencies into your decision-making
• Disruption is, always, a fact of life.
• When you’re making decisions about supply chain management, the best practice is to build
in margin to allow for the unforeseen.
• Each decision should include a backup plan in case circumstances that you can’t predict
render your original plan unworkable or inefficient.