APPLYING SUPPLY CHAIN MANAGEMENT IN COMPANIES

Supply Chain Management (SCM) is a way of managing the supply of raw materials, products, information, or services needed by a company from the beginning to the end process that is effective and efficient. The purpose of supply chain management is to control and develop the organization through the principles and processes of management, so that in managing the supply chain process can produce products that are efficient and effective. According to David Jacoby, there are 4 principles that underlie supply chain management, namely:

• Efficiency. What is done by management must be based on the principle of low cost and minimum time.
• Reliability What is produced is always consistent, both in terms of product and service quality.
• Flexibility What management does must be flexibility both in the rules and in the ability to follow the rhythm of customer demand.
• Innovation. The principle of innovation is needed because competition in the market is not fixed and continues to change.

There are three major components in the SCM concept, namely:

• Network structure. Determine who are the main members of the supply chain. Usually selected levels from managers to upper levels or top management who are considered to have the right to make decisions in determining the business.
• Business process. Determine what processes must be associated with each member of the supply chain. It contains a mapping of what processes are carried out from beginning to end, namely:
  
  Order process: the total time spent from the customer placing an order until the customer receives the item.
  
  Customer service process: all customer service from before, during and after the sales transaction.
  
  Distribution process: services ranging from the procurement of products requested by customers to the delivery and receipt of these products by customers.
  
  Product manufacturing process: to reduce unnecessary or overlapping things or work and speed up the process to be ready to be marketed.
  
  Supply process: the process of selecting suppliers, selecting products, testing the ability of suppliers, building commitments, agreeing together work agendas and ethical standards, and approving supplier development programs.
  
• Management component. Consists of two large groups, namely:
  
  Structure components: organization, planning and control, information distribution process, and production flow.
  
  Components of behavior: management principles, owner philosophy, power structure, payroll structure, and corporate culture.

In implementing supply chain management, there are ten processes that must be managed, namely:

• Information flow and content. Management must be able to manage information from the most upstream party to information from the downstream party or end user of the product.
• Production. Production flow from upstream, in the form of raw materials, to end users.
• Customer Relationship Management (CRM). Forming an emotional bond between all parties involved with the hope of all contributing to action for a common goal with the principle of 'win-win solution'.
• Supplier Relationship Management (SRM). Establish emotional bonds between all suppliers. The concept is almost the same as CRM.
• Customer Service Management (CSM). Able to provide solutions for all parties involved. Become a spokesperson and ambassador of the company in dealing with parties outside the company.
• Demand Management (DM). SCM is able to follow the company's processes and activities in increasing the demand for the company's products.
• Order fulfillment. The process starts from the appearance of orders, processed, until fulfilled orders are the responsibility of SCM. Must meet 6R, right goods, right place, right time, right price, right quality, and right quantity.
• Accountability SCM is responsible for integrating the manufacturing or product formation process or service from the initial design to the end customers' acceptance.
• Product development and innovation. SCM is also responsible for the product development process to the market stage.
• Product return. Product returns due to shipping errors, damaged goods, or refilling processes are also the scope of the SCM proce

Tweet