Supply chain analysis evaluates each stage of a company’s product delivery process to determine how it can be improved without sacrificing quality or customer service. Mapping the process helps identify areas for improvement, such as consolidating suppliers to reduce shipping costs and speed up delivery. This analysis works in collaboration with logistics management to expedite the transfer of goods and information and speed up time-to-market.
Supply chain analysis is the process of evaluating each stage of a company that delivers a product to customers. The analysis requires an assessment of each step, from the time the business purchases raw products or supplies from suppliers or vendors to the time the business delivers products to customers. The purpose of the analysis is to determine which steps in the process can be shortened, refined, or made better, to shorten the time it takes to deliver product to customers without sacrificing product quality or the company’s level of customer service.
The thought process behind supply chain analysis is that the more flexible a company can be, the more likely it is to be able to respond to customer needs. A number of other benefits can come from a firm that also undergoes supply chain management analysis. These benefits include having sufficient inventory instead of too much or too little inventory, improved forecast estimates, and improved planning and scheduling.
Supply chain analysis begins by mapping a company’s manufacturing process from start to finish. A flowchart is the typical representation for mapping the process. The chart identifies all the players in the chain, including the suppliers of the raw products used by the company to make or produce the product it sells. It also maps player interaction, such as how raw materials reach the farm.
An assessment of the flowchart and player interactions helps the analyzer determine where changes can be made to improve the flow. For example, the chart might reveal that all raw materials for manufacturing come from different suppliers spread across the country. He or she can identify that one of the suppliers the company works with can supply all raw materials. While the cost of raw materials may be slightly higher, shipping and delivery costs may drop dramatically, and having supplies sourced from a supplier may also speed up the delivery process.
Supply chain analysis collaborates with logistics management: how product or information flows from one point in the process to another. Logistics analysis and supply chain analysis allow business managers or owners to determine how to expedite the transfer of goods and information at each point in the process. This speeds up product time-to-market, which is what makes the company money.
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