Lean Operation of Supply Chain Management Strategies in FMCG Industries

Nowadays, Supply Chain Management plays an important role in the business and industry. Supply Chain Management involves optimizing industrial operations to increase both speed and efficiency. Both speed and efficiency are vital to increasing the power of industry to handle their partners in a structured manner. The FMCG industry is on a high growth in almost everywhere. Proper supply chain management practices are very important for FMCG industries because customers will choose the company that meets their needs fastest. Therefore, it is also important to get competitive advantages in the global market. 

Industries increasingly find that they must rely on effective supply chains or networks to compete in the global competition. Industries are now realizing that customer-driven supply chain configuration helps them to participate in achieving growth. This requires appropriate thinking on the ways in which an industry would structure itself in terms of its key supply chain tools. Supply Chain Management Strategy is absolutely important for industrial success. Industries with geographically more extensive supply chains connecting diverse trading groups tend to become more effective, innovative, and productive as well as customer focused.

FMCG products are closely associated with direct end users. The influence of consumers related to choice, like and dislikes, demography, seasonality, brand, marketing etc. are peculiar. The volume of products, movements of goods is quite large in comparison with other types of products. Distribution channels are wide and complex in FMCG industries. Hence scope and role of the supply chain are crucial considering the financial aspect of an organization. The turnaround of goods in FMCG industries are quite frequent, it is directly correlated with the end user and measurements of system parameter are comparatively clear hence FMCG industries are chosen for study in particular.

Supply management is evolved through various phases in the industry starting from traditional storekeeping, purchasing, logistic, materials management, and integrated materials management to supply chain management. Its performance is measured through parameters and attributes like reliability, responsiveness, flexibility, cost and asset management for better clarity and understanding of the function. Each of the parameters has its own attributes which are part and parcel of supply chain activities. The function is supported with resources like hardware, software, assets, and manpower.
The concept of supply chain management (SCM) is getting rooted in industry. However, during the past 5-10 years, there has been an increased focus on SCM as a competitive weapon due to the significant effects that supply chain activities have on all elements of an organization's financial performance, including operating costs, revenue growth, and asset management.

The following are five basic components of SCM:
  1. Plan: This is the strategic portion of SCM. The organization needs a strategy to manage all resources that go toward meeting customer demand. A big piece of SCM planning is developing a set of metrics to monitor the supply chain so that it is efficient, cost less, and deliver high quality and value to customers.
  2. Source: Where the organizations must choose suppliers to deliver the goods and services they need to create their product. Therefore, SCM manager must develop a set of pricing, delivery and payment processes with suppliers and create metrics for monitoring and improve the relationships. Then, they can put together processes for managing the goods inventory, including receiving and verifying shipments, transferring them to manufacturing facilities, and authorizing supplier payments. 
  3. Make: Which is the manufacturing step. SCM managers schedule the activities for production, testing, packaging, and preparation for delivery. This step is the most metric-intensive portion of the supply chain, where organizations are able to measure quality levels, production output, and worker productivity.
  4. Deliver: Many SCM insiders refer this step as a logistics, where organizations coordinate the receipt of orders from customers, develop a network or warehouse, pick carriers to get products to the customer and set up an invoicing system to receive payments.
  5. Return: This can be a problematic part of the SCM for many organizations. SCM planners have to create a responsive and flexible network for receiving defective and excess products back from their customers and supporting customers who have problems with delivered products. 

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