4 Stages and SCOR Operations Model

Hi,

Today we are going to be dealing with the 4 stages of Supply Chain and SCOR Operations Model.

You can determine which of the category or stage your firm belongs to. For the most part, you can locate any company in any of the 4 stages. Then we would venture into the SCOR Operations Model.

Let’s get right into it!

The 4 Stages of Supply Chain

The diagram below gives a wide and straight idea where many firms (manufacturing and service) belong. Yes, where they belong. If you were in a firm that behaves like Stage 1, where Billy doesn’t share business information with Willy you would know right away.

About 80% of the companies in Nigeria are in stages 1 and 2. The lack of effective communication (both internal and external) and seeming partnership to increase the core competencies of these companies to reach their objectives as regards the triple bottom line (Economic, Environment and Social Responsibility) has terribly reduced their ability to compete on a global scale and increased the tendency for the companies to die young.

A lesson here, is, to structure you company (if you are top management staff or you could propose it) to achieve the following guidelines.

SCOR Operations Model

The SCOR Operations Model is a standard model that fits properly for manufacturing firms even though a service company can implement it. SCOR means Supply-chain operations reference model. It’s the backbone of the operations contained in a supply chain. Most FMCGs (fast moving consumers goods) companies are heavily involved in using this model. When used effectively the total cost of goods ownership (TCOGS), inventory handling cost, transportation cost etc are reduced in order to maintain and increase profits.

The model has 5 important actions and this is what it takes, ladies and gentlemen, for a firm to satisfy a customer.

Plan – processes that balance calculated demand and supply to take action in sourcing and requirements

Source – processes that gets or procure goods and services to meet planned actual demand

Make – processes that transform raw materials and products to finished goods for sale to meet demand

Deliver - processes that provide finished goods and service to customers through transportation, distribution

Return – processes associated with returning default, used goods, damaged etc for recycling, disposal

There you go, so if you are a CEO or MD…planning in this way would reduce your stress.

If you are someone that’s on a journey concerning these things  I hope this helps.

Till next time…enjoy!

The 4 Main Flows, Manufacturing and Service Models

Hello there!

I am pretty sure you enjoyed the weekend.

Onward to the business of the day, I mentioned in my last post…I would prefer to call it episode. I mentioned in my last episode that I would be sharing on the 4 main flows of a supply chain in line with the manufacturing and service models.

It is essential that young Nigerians understand the importance of supply chain. Global supply chain mechanisms made it possible for global trade that involves goods and services. You can help your company save its running expenditure just by cleverly designing the model of shipment of a cargo from Lagos to London. Or save money and time for a delivery company by designing a more effective routing system. It could even be the use of an effective communication and real time work mechanism in terms of any ERP (Enterprise Resource Planner). The list is endless. As we move along we will find out specific applications to real problems and discuss them.

Four Main Flows in Basic Supply Chain

The diagram below states clearly the 4 main flows of a basic supply chain; information flows both ways on the chain; cash flows one way upstream i.e. customers pay a retailer and retailer pays distributors; products flow downstream from manufacturer to distributor; and products for disposal or recycling flows upstream.

Manufacturing Supply Chain Model

Again, below is the way information, cash, products and materials flow in the supply chain. This explains how you got the clothes you are wearing right! Doesn’t it?

 Services Supply Chain

Finally, the services supply chain model. I am sure you are familiar with it.

Alright, that pretty much wraps up the deal for today.

In my next post…episode I will be sharing on the 3 types of supply chain strategies and Operations Reference Model.

Don’t miss out, till then…enjoy yourself!

3 Entities and 2 Types of Supply Chain Management

I hope you had a nice and blissful weekend,

Right to the mark!

In my last post I said I was going to share a thought on the types of entities and main types of supply chain.

Let’s discuss the 2 main types of supply chain:

1.       The Lateral or Horizontal Supply Chain

2.       The Vertical Supply Chain

The horizontal supply chain is the system where a firm or company or a group of companies retain their core competencies and function together to deliver a goods or service to customer or end user.  The Vertical supply chain means one firm or company owns the whole system of producing the product or service from start to finish.

The vertical supply chain is out of fashion these days because it is very tasking for a firm to own the iron ore mine, the blacksmith firm, the iron sheet manufacturing firm, the wholesaler shipping firm, the distributing firms and the retail firms as well. Won’t that be tasking? This is a vivid picture of a vertical supply chain system. 

Onto some graphic representation

Vertical Supply Chain                                  

One firm owns the line of operation

 

Horizontal Supply Chain

Each entity is owned by different firms as a core competency

Now that we have got that out of the way, let’s look at the entities of the supply chain.

The 3 Basic Entities of a Supply Chain

That’s a wrap for now.

My next post will cover the 4 main flows, manufacturing and service supply chain models.

Till then, stay in the mix!

Basic Pattern of a Supply Chain

Well, it’s been a while since my last post. It is evident that this blog is new but set to inspire the minds of both old and young Nigerians and the rest of Africa about the enormous benefits of a sound supply chain system.

It’s not my plan to bore you with my life’s stores but just on my way to religious center in south-west Nigeria. I noticed the premise had fewer cars parked than at the beginning of year. That tells a lot, doesn’t it?

Ok!

Back to supply chain. I would like to start at the grassroots’ stage up to the advance levels.

To one that doesn’t know a thing on supply chain, it’s basically the entire chain of taking raw materials and turning them into products/services, conveying them from the manufacturers/service providers to the consumers through various channels in a cost-effective and profitable way. That’s just it.

Simple supply chain diagram:

Well, above is the basic diagram of how the television or car you bought the other day got to you. There is also the possibility of Reverse Logistics. We discuss that later on.

So, a supplier gives raw materials to a producer and the producer supplies a retail store that sells to a customer (that’s you). Information flows both ways along the chain (up and down stream). For the cash flow (we all love cash), it flows in one direction only; the customer pays the retailer who pays the producer who then pays the supplier of the raw materials. Finito!

I hope you’ve learned something from this.

My next post will explain the 2 types of supply chain and the form of categories of events and firms that fall into the 3 entities shown in the diagram.

Till next time, enjoy your world.