Scope of Activities for Supplier Quality
In the current day's scenario, certain organisations outsource the movement of raw materials sources and distribution channels in order to be more flexible and cost effective. This increases the number of organisations in the Supply chain and at the same time, reduces the management control of day-to-day transactions.
The supply chain activities can be classified into three broad categories - strategic, tactical and operational. Strategic activity is closely associated to the corporate strategy and guides supply chain policies from the design perspective. As the term implies, strategic decisions are made normally over a long time. The organisation's strategy is aligned with the supply strategy. It includes partnerships with the suppliers, distributors, customers and establishing communication channels.
The Tactical aspect refers to sourcing contracts and making purchasing decisions. All aspects of contract are handled during this process. Inventory strategy, transportation strategy (the frequency, rules, routes and contracting), Benchmarking and focusing on customer demands are part and parcel of this activity.
Operational decisions are short term, and focus on activities over a day- today basis. The effort in these types of decisions includes demands to effectively and efficiently manage the product flow in the designed supply chain. Demand planning and forecasting, sourcing planning, warehousing, transportation are some of the activities. Over a period of time supplier quality rating provides a quantitative summary of supplier quality. This type of rating is useful in deciding how to allocate purchases among suppliers.
Normally there are three different activities that place in a Supply chain management. These include:
- Purchasing or Procurement.
Purchasing chiefly identifies the suppliers who sell materials. These potential suppliers are graded on their quality, cost competitiveness and delivery costs.
Logistic activity involves the management of all inbound and outbound movement of finished goods, inventory management and storage and vehicle scheduling.
Support activities typically refer to the support lent by other departments like HR, document storage and finance.
A comprehensive supply chain thus includes a good Inventory management system, good plant and distribution network, sound logistics, good customer and supplier relationships.