Stepping Stones to Business shows on how to identify between Supply Chain Management, Inventory Management, and Quality Control. Below are the concept maps for each operations and management. You can find more details by clicking the options above. You can always view back this page by clicking on the 'replay' on your left and select 'September 2012'.

Supply Chain Management

 

 

 

Inventory Management

Quality Control

 

An active management of a group of interlinked business by coordinates and integrates it to transform the raw material or unmanufactured one to the manufactured one and deliver it from the supplier, retailer and at last, to the customer.



1. PLANNING
A strategy must be developed to address how a given product will meet the needs of the customers and it focuses on planning a profitable supply chain.

2. DEVELOPING
Involves building a strong relationship with suppliers of the raw materials that are needed in making the product the company delivers and also creating methods for shipping, delivery and payment.

3. MANUFACTURING
The product is manufactured, tested, packaged and scheduled for delivery.

4. LOGISTICS
Customer orders are received, and delivery of the goods is planned

5. RETURNS
Customers can return defective products. The company also must address customer questions during this stage.



1. STRATEGIC LEVEL
Strategic network optimization, including the number, location, and size of warehousing, distribution centers, and facilities.
• Strategic partnerships with suppliers, distributors, and customers, creating communication channels for critical information and operational improvements
• Product life cycle management, so that new and existing products can be optimally integrated into the supply chain and capacity management activities.
• Information technology chain operations.

2. TACTICAL LEVEL
Sourcing contracts and other purchasing decisions.
• Production decisions, including contracting, scheduling, and planning process definition.
• Inventory decisions, including quantity, location, and quality of inventory.
• Transportation strategy, including frequency, routes, and contracting.
• Focus on customer demand and Habits.

3. OPERATIONAL LEVEL
Daily production and distribution planning
• Production scheduling for each manufacturing facility in the supply chain (minute by minute).
• Demand planning and forecasting, coordinating the demand forecast of all customers and sharing the forecast with all suppliers.
• Sourcing planning, including current inventory and forecast demand, in collaboration with all suppliers.
• Inbound operations, including transportation from suppliers and receiving inventory.
• Production operations, including the consumption of materials and flow of finished goods.
• Outbound operations, including all fulfilment activities, warehousing and transportation to customers.
• Order promising, accounting for all constraints in the supply chain, including all suppliers, manufacturing facilities, distribution centers, and other customers.
• From production level to supply level accounting all transit damage cases & arrange to settlement at customer level by maintaining company loss through insurance company.

A stock of goods held by a company for some objectives or goals and moreover, they got their own economic values in the market.



Increasing in inventory levels will lead to a reduction in the holdings cost in which the company decreases its expenses, insurance and theft to retain the stocks of goods to be sold soon. This will lead to an increase in the flow of net income and profitability of the business as long as the revenue gained from the selling of the goods remains in a fixed value throughout.



Woolworths Limited is a major retail company which has not only expanded to various areas around Australia but also in New Zealand and India as well. Throughout the past years, Woolworths have been praised for their effective inventory management systems that have contributed largely to their success. In retailing companies, inventory management plays a vital role as if there are not enough on-hand goods, the customers will start to start looking at other places to shop and if there’s too much of stock, the company may face high funding costs. In Woolworths, the inventory level at June 30, 2004, was $1.8 billion and trading revenue for the year 2003, in year 2004 was $27.9 billion. Daily inventory was 23.5, meaning that on average stock turned over every 23 days throughout 2003 to 2004.

Woolworths has an impressive record of steadily reducing its ratio of inventory from 35 days in the mid-1990s to the current level. The costs for money to hold the inventory requires lowering the number. It is from capital efficiency’s point of view. Woolworths is very good at cutting cost what it pays to producers and manufacturers, and what it pays for warehousing and transportation out of its supply chain. Part of those saving goes to company’s profit and to customers through price reductions.

Aggressive pricing means retain of customers and turnovers keep on rising. A higher turnover leads to lower inventory, lowers the company's need for capital and a better return for shareholders. If good inventory management is leading to a more efficient use of capital it should be reflected in a higher return on capital. Return on capital is very similar to the more commonly used ratio, return on equity. Instead of measuring the rate of profit earned on shareholders' equity, it measures the return on the two main sources of corporate finance that is the equity and borrowings. Therefore, the return on capital for Woolworth has been rising steadily from about 15 per cent in the mid-1990s has risen to 28 per cent in 2011.

A set of methods with the intention to make sure that whether a manufactured or final product and the services provided to the people can reach the criteria of a good quality or reach the demands of the consumers.



1. RECRUITING QUALITY CONTROL ADMINISTRATOR
A suggestion on maintaining a high standard in quality perspectives. In terms of odour, taste, and product’s efficiency, it requires a humanly quality control tester to carry out those tasks. Rather than a real person holding this responsibility, with the advancement in latest technologies companies are able to enhance their quality control performance by using an automated system to identify the final products before to be commercialised. Most of the firms are more likely to hire existing employees who only hold on to basic duties to take this job on becoming a quality control tester. These chosen employees will be trained to learn how to do quality inspections. This comes in handy when companies wish to save up their expenses. Thus, quality inspections aid the process to be fluent.

2. COMPUTERISED SOFTWARE, SigmaQuest
Enhances the accuracy in identifying the quality of products. SigmaQuest Incorporated designs an application which helps to examine the products’ quality and also improving the product efficiency. Currently, this software has been updated to control over chemical substances inside each products called as ROHs Directive, an abbreviation for Restriction of the use of Hazardous Substances. This assists the OEMs to comply with the quality standards in some products which may contain unwanted harmful substances deteriorating consumers’ health. Therefore, SigmaQuest software is advisable to consider a helpful tool in helping the business.

3. STATISTICS
Helps companies on knowing how well the quality of the products throughout a specific period. These statistics ensure that does the manufacturing process is always in good shape and if there is some problems, the companies will try to correct the mistakes and this is how the business control their quality of goods. When plotting out these statistics, firms are able to send the performance report to Stat Soft Company. They will help their clients to draw out graphs and charts related to quality control performance. Hence, statistics are another alternative to boost quality control in companies.

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