Supply chain management can be broadly categorized into five steps or areas:
Plan. Using supply chain analytics and materials management features in ERP systems, organizations create strategic plans to meet customer demand for product and avoid a bullwhip effect.
Source. Organizations identify and select vendors that can supply materials in a streamlined and efficient way according to agreements. Supply chain collaboration starts at this stage and is important throughout the supply chain management process.
Make. In this stage, products are manufactured. It includes scheduling the production, testing, ensuring compliance requirements are followed, packing, storage and release. Multiple machines are likely to be involved, especially for larger companies, and these increasingly use technologies such as IoT and AI to work more efficiently.
Deliver. The delivery stage pertains to logistics and focuses on getting finished goods to consumers, in whatever manner of transportation is needed. As the Amazon effect has grown, especially as a result COVID-19, more focus is on doorstep delivery. Greater emphasis is now also on supply chain leaders working more closely with customer service. Inventory management and warehouse management systems are especially crucial at this stage.
Return. The return stage includes all product returns, including defective products and products that will no longer be supported. This stage also includes elements from other stages, including inventory and transportation management.
