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Supply Chain Management: Definition, Benefits, and Stages


28 February 2022
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Supply chain management is a term that refers to a set of strategies and business activities related to the flow of goods and services produced. These activities include planning, supplying, producing, distributing goods and services, until they are accepted by consumers.

With proper supply chain management, your business or business will get higher profits because an optimized supply chain results in lower costs and faster production cycles. Each business unit or business has a different management strategy, adapting to supply and demand.

Therefore, you as a business actor need to know the components and stages of supply chain management in accordance with the needs of the industry and your business development. This article will discuss matters relating to supply chain management and its application in business.

 

Benefits of Supply Chain Management

Summarized from the book Success in Supply Chain Management (Willem, 2019), the right application of SCM will have a positive impact on increasing company profits and growth. Here are the benefits.

1. Consumer Satisfaction

Satisfaction with the goods or services ordered makes consumers willing in the long term. To make consumers stay loyal, you as a producer must be satisfied with the services provided.

2. Increase Income

The number of loyal customers, coupled with the number of company partners, has an impact on increasing the company's overall revenue. The goods produced by your company will not be in vain because they are in demand by customers.

3. Lowering Costs

Proper supply chain management will result in reduced costs incurred for distribution thanks to the achievement of integration of the company's goods or services to the final consumer.

4. Higher Asset Utilization

The company's main asset, namely human resources, will be more trained and skilled so that they are able to empower the use of technology to meet the smooth implementation of the supply chain.

5. Increased Profit

The increasing number of loyal consumers of products produced by your company will have an impact on increasing company profits.

6. The company is getting bigger

From profits that gradually increase, the company will progress and develop so that it grows stronger.

 

Basic Components of Supply Chain Management

Summarized from the Journal of Management Governance 13 (Worthen & Wailgum, 2008), the implementation of supply chain management has several basic components as follows.

1. Planning (Plan)

The success of supply chain management begins with the process of determining strategy by business people. The process of formulating the right strategy aims at achieving efficiency and cost effectiveness and ensuring the quality of the products produced until they reach the hands of consumers.

2. Source (Source)

Companies must choose suppliers of raw materials who are credible and able to support the production process carried out. Therefore, your party must be able to set prices, manage shipments and payments for raw materials, as well as maintain and improve business relationships with suppliers.

3. Making (Make)

Your party must make a schedule of activities needed in the production process, product testing, packaging, and preparation for product delivery. This is the most important stage so your company must also be able to measure quality, production output, and worker productivity.

4. Delivery (Deliver)

This component requires the company to be able to fulfill orders from consumer requests, manage a network of storage warehouses, select and sort out distributors to deliver products to consumers, and set up an easy payment system.

5. Return (Return)

Supply chain management managers must create a flexible and responsive network to address complaints or complaints and return defective products from consumers.

 

Supply Chain Management Stages in Business

The application of supply chain management in business includes six stages in business. Here is the explanation.

1. Customer (Customer)

The supply chain management process starts from the consumer who orders the goods. In this ordering process, the customer will provide information related to the product, such as the order quantity and delivery date.

2. Preparation (Planning)

After the order is received, your company can create a production strategy or plan to fulfill the order. The production team is responsible for providing raw materials according to the required requirements.

3. Transaction (Purchasing)

This stage includes the purchase of product raw materials which are carried out after there are details of the production plan. The purchasing team will contact the supplier for the purchase of raw and supporting materials and record the date of receipt and the amount of raw materials purchased.

4. Raw Materials (Inventory)

After the raw materials are purchased, quality checks will be carried out. If the quality meets the specified requirements, the raw materials will be stored in a storage warehouse for later processing.

5. Production

This step includes the processing of raw and supporting materials to be used as products according to consumer orders. After going through the production process, the goods will be stored in the warehouse first to be prepared for the next stage.

6. Delivery (Delivery)

The last stage in SCM is the delivery of goods from the factory to be distributed to consumers who have ordered products. The main task of the courier is to ensure that each item is delivered in accordance with the conditions, quantities, and dates that have been ordered.

 

Examples of Supply Chain Strategies for Business

The following supply chain strategies can be applied in a business:

1. On-Demand Management

One of the aspects covered by SCM is the consumer. This means that it is very important to look at historical data on what customers need and share that information with all stakeholders in the supply chain.

That way, the cycle can run more efficiently. Your company will also be better able to anticipate future customer demands.

However, this strategy takes time to adopt and getting accurate numbers is tricky. In addition, the analysis of these figures can be interpreted in different ways which will lead to the potential for bias or uncertainty.

2. Agile Management Based on Circumstances

This supply chain strategy focuses on changes in the market, material availability, seasonal fluctuations, and consumer demand and how your company can agilely respond to them. If you can apply this strategy correctly, the supply chain cycle will run more efficiently and effectively.

For example, a company may buy some finished materials and then quickly carry out production accompanied by adjustments in response to current market conditions. This strategy works best if the product can be modified quickly or has a short service life.

You can't apply this strategy to all situations. The application will not be suitable if your company requires more long-term resource planning. Instead of saving money, what happens can increase waste and inefficiency.

3. Collaborative Supply Chain Management

Considering that there are many parties involved in the supply chain, of course the collaboration in line will support increased efficiency. For example, your company collaborates with raw material suppliers in terms of providing specialized transportation services so that delivery can be more guaranteed.

This collaboration is not always an easy thing to do, but it can provide significant savings and improvements in terms of performance. This strategy can also anticipate changes that occur based on market conditions, for example, pandemic conditions that affect all aspects of the industry.

Another advantage of this strategy is the sharing of costs and risks so that it is not borne by one party only. Therefore, there is a need for clear communication and agreement on the priorities and objectives of each collaboration so that this collaborative strategy can run in a balanced and concurrent manner.

Find out more about Supply Chain Management by following various trainers. One of them is the Supply Chain Management Program from prasmul eli. You can get various knowledge about purchasing strategies to supplier selection.

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Employee Engagement, One of the Effective HR Strategies
19 June 2024

One of the determining factors for company stability and success is employee engagement. Behind the company's reputation and success as seen from the outside, it cannot be denied that the active role of the employees is also involved.

So, what is included in employee engagement as an effective HR strategy to support successful company branding?

This concept, which was first popularized by  Gallup Consultants in 2004, is an attempt to understand the relationship between companies and their employees. This thing can be measured both qualitatively and quantitatively.

So what is its role that is called one of the efforts that HR can make to build the success and stability of the company? Read this article to the end to understand the concept, okay?

The Important Role of Employee Engagement

Even though the aim is to contribute to the success and maintain the stability of the company, employee engagement can be seen from two sides, namely the perspective of the company and the employee.

From a company perspective, employee engagement is an effort to assess how loyal employees are at work. This loyalty is not only assessed based on the work completed, but also includes the duration of the work and its quality.

Apart from that, companies also want to know whether employees feel proud of what they do for the company.

Meanwhile, from an employee's perspective, employee engagement is an effort to realize their role in the company. This needs to be known so that the company can continue to support employees so that they remain enthusiastic about working.

Apart from that, it can also foster a sense of having contributed to the company while working at the company.

It can be concluded that employee engagement is not only concerned with the company, but also seen from the employee's perspective. However, basically there is only one goal, namely to help maintain the stability and success of the organization within the company.

Strategy to Increase Employee Engagement

There are several strategies for increasing employee engagement within the company. This strategy certainly needs to be tried for those of you who want to measure how successful this concept is in the company.

The following is the strategy:

Intense Communication

Establishing intense communication can foster a sense of trust between the company and employees, as well as team members and managers. In employee engagement, communication needs to be two-way and intense to understand the company's position and employee opinions.

Some examples of building intense communication are as follows:

  • Hold regular meetings to share important matters within the company and let employees understand the state of the company.
  • Create communication channels that are easily accessible, for example mailing lists, communication groups for short messages or groups on the office communication channels used.
  • Create a digital form for suggestions and criticism when the company holds activities for employees. This is useful for understanding whether employees enjoy or have other input for the program provided.

Rewarding Positive Contributions

Getting to know employees well, appreciating achievements and providing opportunities for self-development is one of the employee engagement efforts. With this, employees feel more positively appreciated and motivated to work harder or be more comfortable in the company.

Opportunities for Self-Transformation

In an era of intense business competition, giving employees the opportunity to transform themselves can be an employee engagement effort provided by the company. By providing opportunities for self-transformation for employees, it can make employees more persistent and improve their skills.

This can certainly help the company in the end. Some examples of self-transformation opportunities for employees are as follows:

  • Providing challenging projects for employees who like challenges at work.
  • Organize training both according to duties and to develop other skills.
  • Make a clear career plan for each employee so that they have a clear picture and make their performance better and more enthusiastic.

Benefits of Employee Engagement

In general, the benefits of employee engagement are improving work results in the company. However, there are several quite significant benefits that can be generated by people engagement as an HR strategy, namely;

Absenteeism Rates Decreased

Employees who feel engaged or feel connected tend to be loyal to their jobs and the company where they work. This is because he may be more motivated and also find the work environment pleasant.

Positive engagement between employees and the company will help improve the percentage of employee attendance.

Increasing Employee Production

What makes a significant difference with employee engagement? Another thing that is quite profitable is increasing the production of employee work.

If this can be applied to the majority of employees, it can certainly speed up the process of realizing the company's vision and mission.

Extending Employee Service Period

Employees will tend to stay in a company if they feel appreciated. This way of appreciating employees is one of the employee engagement efforts.

Employees who feel involved and appreciated will be more enthusiastic about working. As a result, employees will stay in a company for a long time because they believe they can grow together.

Employee engagement is only one of the efforts made by the company through HR. To do this requires skills in leadership and resource management.

These two things are important points and can be learned at prasmul-eli!

Currently, prasmul-eli is opening a short program that will provide material regarding leadership skill development, resource management, innovation strategies and much more. The short program at Prasmul-Eli also presents presenters who are experienced in their fields.
With this, of course you will get a lot of insight. Interested in joining this program? Click this link for further information!

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Change Management: Meaning, Benefits, Framework, and Steps to Do It
18 June 2024

In a company, changes can result in decreased work productivity and even losses. Therefore, proper change management is needed.

There are several types of frameworks that you can use to ensure changes in your business can be implemented and accepted well. In this article we will explain in full about change management.

What is Change Management?

Change management is a systematic step that companies must take in implementing organizational, operational changes, and the technology adaptation process. In other words, companies must ensure change continues while encouraging employees to take part in it.

According to TechTarget, change within a company, on any scale, can cause stress and discomfort. Decreased productivity and job satisfaction are only a small part of the negative impacts of messy change.

Before making changes within your company, you should consider the following:

  • Impact of changes on operations and employee conditions.
  • Prepare clear stages and implementation schedule.
  • Document all stages and change processes so that nothing is missed.

All of the above considerations will form the right change management plan. You can also choose a framework that suits the type of change and all employees.

Benefits of Change Management

If the company has a structured and systematic change management plan, the following are a number of benefits that will be felt:

For companies

  • Complete system and documentation.
  • Ensure the similarity of expected and occurring changes.
  • Automation systems can be adopted precisely and quickly.
  • Can identify what needs to be changed and eliminated.
  • Can determine infrastructure whose function can be changed.

For employees

  • Understand the reasons and solutions carried out by the company in the change process.
  • Understand the role and impact that can be provided during the change process.
  • Equalize the perspective and feelings of each employee towards change.
  • Understanding that his and the company's future is on the same path.
  • Can compare expectations and facts of changes that will occur.

Types of Change Management Frameworks

As mentioned above, there are several types of change management frameworks to ensure a smooth process. Summarizing Apty, here are four frameworks commonly used by companies in carrying out change management.

Kotter change management

This framework was popularized by Harvard professor John Kotter. The process he introduced is popular and has been used by many companies since 1996.

Kotter divides the change management process into eight important steps.

  1. Create urgency for change.
  2. Building collaboration within the organization to support change.
  3. Create a strategic and realistic vision.
  4. Can convey the vision well and clearly.
  5. Encourage various parties to take part in the process.
  6. Celebrate all small and short-term achievements.
  7. Maintain the duration and speed of the change process.
  8. Cultivate and form a corporate culture within the company.

When creating urgency for a change, you must be able to convey the reasons and the problem you are trying to solve. Make sure this information is conveyed transparently to employees.

Lewin's change management model

This change management model is quite simple, Lurt Lewin describes the following three phases.

Unfreeze

This phase is used to map out what needs to be changed and what kind of preparation is needed. In detail, pay attention to the following three things:

  • Decide what to change.
  • Analyze the company's current operations and what changes need to be made.
  • Communicate changes transparently.

Change

This phase is when all changes begin to be implemented. Make sure these two things are done:

  • Ensure all employees understand the positive impact of change.
  • Provide training and time for employees to adapt.

Refreeze

This final phase is to ensure the changes are implemented correctly. Three things to do are:

  • Convey again the goals and impacts that will occur from changes to the company's internal processes.
  • Ensure company stability during and after changes.
  • Celebrate success and success in making changes.

PDSA

This change management is a framework that prioritizes continuity. This means that even though changes have been implemented, the process will continue to be optimized and developed. The PDSA stages are:

  • Plan – Identify changes and develop a plan.
  • Do – Make changes from the smallest scale.
  • Study – Analyze the results of changes and identify successful patterns that need to be corrected.
  • Act – Make decisions and implement changes based on analysis and lessons learned.

This change management helps companies and employees to remain flexible and develop.

ADKAR model from Prosci

This framework prioritizes perceived outcomes in change management. Prosci outlined these five results or achievements:

  • Awareness – Company management explains the changes that will occur and their causes.
  • Desire – Leaders and managers ask for employee support through case studies and facts about company conditions. It is recommended to conduct 1-on-1s to understand employee opinions and concerns.
  • Knowledge – Changes are implemented thoroughly. Companies must hold training to support employees in adapting.
  • Ability – Employees will begin to apply changes in their daily work.
  • Reinforcement – ​​Give appreciation to employees for implementing and making the change a success.

Steps to Perform Change Management

If you look at the various frameworks above, the key steps for effective change management are:

Open-minded leader

Quoting Asis Online, feelings of frustration and uncertainty in change can be overcome by a company that can embrace all parties and be open. Internal stakeholders, clients, employees and consumers must receive a complete explanation and understand the new steps the company will take. The right leader will ensure all of those things happen.

Involvement of all related parties

Still related to the previous point, change requires help from all parties in the company. Every team, stakeholder and employee must work together to carry out and support the change process.

Open and clear communication

It can be concluded from the various frameworks above, transparent, intensive, effective and personal communication can help the change process run smoothly.

Change-related training

Employees must receive training and be given realistic time to adapt to changes. Managers can hold 1-on-1 sessions to check on employee conditions.

Clear success metrics

The final step is to determine realistic and clear targets for success. Frustration and uncertainty can result from metrics that are “too high” or impossible to achieve in a short time frame.

That is a summary of change management so that companies can avoid problems that could have a bad impact.

Through proper change management, the mission and vision of leaders and employees will be united. Therefore, change management is a process that must be prepared carefully.

Before making a decision, you should first study the change process and management.

Join the prasmul-eli short program and learn about various change processes and management!
Click here now to discover classes and programs!

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Customer Relationship: Meaning, Benefits, Types, How to Build, and the Difference from Customer Service
17 June 2024

The relationship between business and consumers must be a primary concern and continue to be maintained. Building strong customer relationships is one way.

Consumers always expect business commitment to provide the best products and services. Consumer loyalty is a result that will be directly proportional to business profits.

In this article, you will learn in depth about customer relationships, from the meaning, benefits, types, to how to build them.

What is Customer Relationship?

Customer relationship is a method used by companies to ensure customer satisfaction and loyalty. This method, citing HubSpot, requires companies to proactively provide the best service, solutions to consumer problems, and ensure their needs are met.

Companies with the best products or services are not limited to what they sell. Because today's consumers also want to know the image of the product and the level of company awareness after the product or service is purchased.

Therefore, strong customer relationships will ensure business success in the future.

Benefits of Customer Relationships

In addition from bringing business success, also know the benefits of customer relationships in your business in the short and long term.

  • Consumer loyalty to buy any product sold.
  • Know and understand consumer needs.
  • Becomes important capital in making business decisions.
  • Understand what problems they face and how the product can help them.
  • Improve the overall reputation and image of the company.
  • Make your brand or business at the top of consumers' minds.
  • Improve customer experience and satisfaction.
  • Creating opportunities for businesses to have more diverse products.

Types of Customer Relationships

Depending on the business, type of product, and type of consumer, there are three types of customer relationships. Summarizing HiverHQ, here is the complete explanation:

Proactive customer relations

Proactive customer relations is directly building customer relationships proactively. Companies must contact consumers before any complaints or problems occur. From the start, companies must:

  • know who the consumers are
  • what are the needs
  • what is the thought process before buying
  • what kind of product is expected
  • what image is expected
  • understand how to keep them satisfied

You can run this type with a variety of rewarded surveys. Make sure the survey is run consistently, for example every quarter (3 months).

Reactive customer relations

Different from the previous type, reactive customer relations is a way for businesses to respond to, understand and resolve problems experienced by consumers. Therefore, you must know all the problems and complaints that consumers convey in various forms and platforms.

Several strategies that businesses can implement to produce positive reactive customer relations include:

  • Validate consumer complaints and input.
  • Apologize and make sure the business is ready to resolve the complaint.
  • Understand the problem and offer the best solution.
  • Follow up even though the problem has been resolved and show concern.

Strategic customer relations

Strategic customer relations means that the company's culture and references are based on consumer needs and satisfaction. Every product made is always confirmed and tested by loyal consumers. Usually this type is carried out by companies that already have a special image in general.

How to Build Customer Relationships

Follow these steps to build good customer relationships:

Build a strong foundation in communication

Good relationships are based on clear and open communication. Convey all information as it is and use sentences that are easy to understand. Avoid jargon or difficult words.

Be realistic and don't lie

Don't give false and unrealistic hopes. Make sure the solution offered makes sense and can be done easily by consumers.

Receive and collect input from consumers

Always record and pay attention to every input, suggestion, and complaint submitted. Use this as a reference for development and solving various problems.

Track the problem resolution process

As long as the problem is not resolved, consumers should not have to report the same thing again. Also track the problem resolution process with the relevant team. Continue to convey how far your team is working.

Anticipate consumer needs

Even though the problem has been resolved, consumers will continue to use your product or service. By understanding consumer habits and profiles, create a list of needs that may arise in the future.

Make the relationship more personal

Make consumers feel like you are a friend who helps them solve problems. You can also call consumers by name in each communication process.

Monitor consumer changes

Monitor consumer changes and check for possible problems that may occur. These problems can be related to how the product works, the taste of the product, the impact of the product on consumers, and even the image of the product.

Competitor analysis

Find out how they build relationships with consumers. Especially competitors in the same industry. You can build stronger and better relationships to attract new consumers.

Understand market changes

Understand market changes and consumer needs. Changes that occur in the economy, ways of thinking, and needs will influence the company's customer relationship strategy.

Reach new consumers

Reach potential consumers who can become loyal consumers in the future. You can expand the range of services or products marketed or add product lines.

Difference between Customer Relationship and Customer Service

In short, here are the basic differences between customer relationship and customer service:

  • Customer service focuses on the process of solving consumer problems directly.
  • Meanwhile, customer relationship focuses on the process of building and maintaining long-term relationships with consumers.

Both play an important role in business and consumer relationships.

Customer relationship is a concrete step to ensure consumers continue to use your product in the long term.

Building customer relationships requires time and the right strategy.

Want to learn more about customer relationships and how to build them?
Join our class and learn how to build good customer relationships, click here now!