What are supply chain modeling and the significance thereof?
Answers
Answer:
A supply chain is a system of organisations, people, activities, information and resources involved in moving a product or service from a supplier to customer. Supply chain modelling is an essential component of developing and validating supply chain and distribution strategies.
Answer:
Supply chain modeling represents a conscious attempt to bring order into a supply chain to achieve certain business objectives, such as lowest supply cost, on-time delivery and an ability to cope with disruption. It deals with questions such as:
What to produce
Market identification
Siting of production plants
Finding the best suppliers
Supplier and plant locations
Transportation and inventory
Distributing finished products
Warehousing strategies
The ultimate goal of any supply chain must be to satisfy the final customer. Satisfied customers return to buy more products, and through this process, successful organizations develop brand loyalty and recognition. According to customer service consultant Micah Solomon, customer satisfaction starts with:
A perfect product
On time delivery
Friendly service
Effective problem resolution
To achieve this, you need the right supply chain model, but not only that, you need to manage it effectively. This demands two things. Firstly, your model must be robust and fit for purpose. Secondly, your model should have internal visibility so you can identify problems and deal with them proactively. You need to be able to interrogate the model to discover the best solution for every key decision.
Supply chain modeling provides forward-looking companies with the tools they need to manage their supply lines to:
Control inventory
Reduce costs
Meet customer demand
Increase efficiency
Respond to demand