What is Supply Chain Network Design?
Supply Chain Network Design (SNDC) also known as 'strategic supply chain planning' is the process for building and modelling the supply chain to understand the costs and time to bring goods and services to market within an organisations available resources.
SCND covers all the movements and storage of raw materials, work-in-process inventory and finished goods from the point-of-origin to the point-of-consumption. It covers the planning, implementation and control of supply chain operations.
How does strategic supply chain planning fit into the planning process?
Planning processes in SCND aim at finding the best possible supply chain configuration so that all operations are performed in an efficient way.
Three planning levels are distinguished depending on the time horizon.
- Strategic: Covers future planning, market factors, capacity and technological changes.
- Tactical: Focused on a shorter planning cycle - demand, inventory and supply.
- Operational: Activities measured in weeks, demand fulfilment, scheduling, production & transport.
What factors influence the Supply Chain design network?
Volatile markets, rapidly changing consumer tastes, constant ambiguity and uncertainty are quickly making traditional linear supply chains obsolete. Their shortcomings are apparent in their inability to keep pace and meet the needs of diverse customer, let alone detect promising new customer segments. Their responsiveness is further compromised by fragmented supply networks and operational inefficiencies that hinder scalability.
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What are the steps to successful application of SCND
- Step 1. Determine the current and future organisation strategy.
- Step 2. Determine the current strategy processes with products, materials and information.
- Step 3. Select key customers and map their features.
- Step 4. Determine the importance of products from the customer points of view.
- Step 5. Determine the organisations waste elimination opportunities.
What are the advantages of Supply Chain Network Design?
- Working SCND can improve customer service and satisfaction.
- Good SCND can balance the costs and service.
- Successful SCND can help a company achieve competitive advantage.
To find out more about this subject read the full knowledge paper: Supply Chain Network Design (SCND)
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