A Blueprint for Supply Chain Optimization

An efficient supply chain begins with a network that consists of a 360 degree view of the
various business areas for management of delivery to customers. This leads to significant
savings on capital, operations and tax while attaining higher customer satisfaction.
Three critical components of a supply chain network are
 Strategy before network
As business goals become more complex, it is imperative that supply chain strategy
should be aligned to business strategy. Often many firms cut costs on network before
understanding and defining, how to leverage network to support business strategy.
Uncertainty in markets, product mix and volume, customer service strategy and value
opportunities should be looked into before defining supply chain network and
strategy.

 Focus on total profit optimisation

Total profit can be optimised through various operating scenarios that require
alternative network models. Sensitivity analysis can be done to assess and improve
parameters to increase shareholder value.

 Project vs ongoing process

Supply chain networks evolve in response to market changes, product line
performance and integration of companies. Supply chain should focus on flexibility
and sustenance and ensure long term objectives are met consistently.

Methods of Planning
Planning helps in guiding and position an organisation. Plans exist to cover unpredictable
situations as a measure to mitigate risks. A framework for planning is mentioned below

 Strategic Planning
Strategic planning is the process of deciding business goals. It defines wide areas
including inventory management, customer service, information systems among
others to maximise return on investment. It is a proactive tool to address issues like
organisational structure, capacity utilisation and network planning. It also helps in
forecasting to efficiently allocate resources in a supply chain.

 Tactical Planning
Planning done usually for one to two years to plan policies and targets to meet
company’s long term objectives. It also includes workload management to prevent
overloading of workforce and develop and build resources to meet the required goals.
Tactical planning first set the time duration for each step, then focuses on the skills
required to complete the task. Third, capital requirements and their sources