* Supply Chain Overview – A Generic interpretation

I have noticed over the years the term “Supply Chain” used in a number of different contexts.  Some of what I read had me pondering, thinking that the meaning may be morphing into something else, for example adverts for jobs looking for a Supply Chain Manager yet the role was traditionally a Purchasing Manager – based on the tasks allocated to the role.

It just appears that some have tried to keep up with the trends and used newer terms but in the wrong way, whether through misunderstanding or up-selling the role. Using the above example I could understand the job title being Supply Manager.

So I looked through my reading materials and across the web to see if someone had drafted an overview of the supply chain on a function bases, not systems or processes. The best, only one really, was found in a project for AUSTROADS  (AP-R150). The aim of Austroads was to improve knowledge and understanding of the freight industry and the customers it services.

I my attempt to get a clearer impression of how the current Supply Chain functions tie together I expanded the diagram published by Austroads. My amendments are based on industries I have had experience with including manufacturing, distribution, wholesale and MRO.

This, I believe is a good representation (Click PDF below) and can be validated by turning it into a real world application by just adding “Manager” after most of the functions shown.  This is the hierarchy I have seen in the majority of cases, although functions can be combined depending on the size of the company.

Over the top of this of cause, can be laid systems such as MRP, DRP, ERP, etc.

I would be interested to see if you have other options or configuration.

PDF: Supply Chain Overview diagram

RFP Design step 2 – The Overview

This section allows the Tenderer to get a concept of what your products/services actually are, how you currently handle them etc. For example, in an RFP for freight I include the following points:

Goods – What the goods are, weight and dimensions of the average carton; smallest carton and largest carton, seasonal ordering patterns, type of product eg: flammable, perishable.

Delivery – What the average consignment consists of by volume and weight eg: average number of cartons, weight and volume. I also include where-ever possible the annual throughput ie total number of consignments with total weight and volume. It is also good to advise them of any special handing requirements.

With the above information, the Tenderers can quickly ascertain how they will approach the project. As with most agreements of this type, the bigger the pie the more they can discount, but this is just an indicator, they will still need to put costs against a desensitized sample report of consignments (this will come later in the program).

Having information summarized at this point will prompt them to quickly review specific parts of the document or ask you targeted questions, while still early into the project. Remember: if one Tenderer has requested further information or clarification, you should provide the results to all Tenderers; this will ensure the playing field is kept level and there is no risk of accusations of preferential treatment.

Next post will be – “Objectives”

Cheers Mark