Share what you know with millions of people
Focus is the best place to turn what you know into remarkable content
Supply Chain Management - A Beginner's Brief
Introduction
In the vast sea of commerce, customers who buy goods and services depend upon sellers to deliver exactly what was ordered and when it is to arrive. Supply chain management is a crucial component of this valuable process and is the engine that fulfills what is needed to build from scratch or assemble from parts in any manufacturing environment. In today’s fast-pasted cyber business, supply chain theory is applied to services and information as well as hard manufactured goods.
Analysis
The essence of supply chain management is applicable to any kind of manufacturing business. For example, an often common sight in America is the young children manning a lemonade stand alongside any street in any town in the US. In this example, the children have to decide how much lemonade that can be sold and after that estimation, they have to get the lemons. How the children go about getting the lemons, arranging for other suppliers should the primary one run out and estimating how many lemons for the next day is part of supply chain management.
In a modern business, demand planning and forecasting estimates the sales and translates that to an available inventory to meet prospective business requirements. In the traditional business of the 1950’s and 1960’s, companies planned a year’s supply of inventory and asked manufacturing to build for that amount of inventory. If mid-year corrections were needed, then either the primary or secondary suppliers needed to change their own capabilities to match the required materials needed.
In today’s cyber business where transactions are accumulated at a furious pace, order management must be swiftly translated to the amount of goods that must be available. To feed that rapid fire pace of order management, a robust manufacturing arm must also have an adaptable supply chain management component. By automating the stages of order management to order fulfillment, the buyer is unaware of the complex nature of supply chain management.
In the case of a service or of information, supply chain theory can also be applied because information that is required needs someone or someplace to supply it. There is a prediction and a forecast of how much that is. Supply chain theory means there is collaboration amongst all of the sources of information that is needed to fulfill a request. For instance, in a hospital, if a program was needed to screen by records a thousand patients, having that information available requires all of the suppliers of information to be able to supply it whether it is the hospital or its affiliated doctors.
Conclusion
Supply chain management is a component of manufacturing but its larger application can include anybody that asks or buys something and anybody that can supply it to the seller to satisfy a request. In this broad concept it can include the traditional manufacturing organization where supply chain management and manufacturing resource planning work together to fulfill orders. By definition, though, it can encompass any kind of transaction in any kind of commerce.
Events
- Marketing Thought Leaders: A Conversation with Julie Fajgenbaum May 25 @ 11 am PT
- The Do’s and Don'ts of Small Business Marketing May 29 @ 11 am PT
- Lead Nurturing 202: The Next Generation May 31 @ 11 am PT
Related Activity
7 Comments
This concept can be applicable to businesses, but it is also applicable to exams themselves. Time is an unrenewable resource that patients/ customers know too well, and decides the success of a business/office regularly. Utilizing technicians has been introduced and accepted to a certain degree (such as preliminary testing, limited testing, and dispensing.) Interestingly, the dynamics of the office as well as the patient base can have a great effect on the business/ office model necessary for success.
It would be interesting to compare the differences of the managment and buisness structure of a chain greater than 15 stores, and independant stores and discover what differences make them most successful and ultimately which business would be most successful with the best staff.
Robert,
Thanks for commenting on this. I can see that you might have an interest in this.
Here is how I would apply the supply chain theory to an eye examination. Manpower, physical space, and equipment need to be in the right place and available at the right time.
Thus, if you knew what the demand was, that is the number of patients there are, then you can schedule or coordinate space, time and tech time to be available for that.
If you break this down to minutes per procedure, then you can call upon extra reserves, rearrange flow to make the resources available.
This application of "supply chain" theory is derivation of the traditional concept of supply chains in manufacturer, but as I said in the brief and what you also propose, the theory can be applied to people or to information.
Thanks for your post and comment.
Nice!!
Ben,
I appreciate your comments.
I don't dispute that "lean manufacturing" might create unintended consequences, but I must also point out that supply chain management theory is a broad based theory of which your concern is a component. Taken in its totality, supply chain theory still requires all kinds of businesses whether medical or not to meet customer or patient needs with products and services when they are needed, in sufficient quality and quantity and at the right place.
I believe that is the essence of supply chain theory.
Ben,
Thanks for your comment.
As you have said, the details you mention are relevant. I also believe that they are microscopic but are not necessarily relevant in all cases. As a clinician and as consultant, I am well aware of the peculiar nature of medical care.
It is somewhat difficult to discuss economics without involving politics since the two seem to go hand in hand so often. I'll try not to show my bias here to keep the discussion on topic. But I see a lot of merit in Richard's presentation. I am probably much younger in my career than either of you two, but I have seen how different business models have found success in different populations.
Often, ordering items bulk (including medical) decreses costs for a business and therefore increases profit, or at least decreases loss. When a supply chain places one order of 1,000 trial lenses or even stock lenses for 25 or so stores, it will prove this. This profit can be offset by the cost of overhead to do those jobs of course but it must be working for some places. There are warehouses and suppliers that can take advantage of this profit and do the same thing. Having a limited selection with display only frames that can be ordered from the lens grinding company can save time and money.
I would like to add a topic to this discussion if I may. The new law change in British Columbia will impact all of us whether we like it or not. In my opinion it will cause the price of an exam to increase in price and value. The requirements for optometry won't change but the publics perception of the need for an eye exam will. How will this affect the supply chain model? Well, how necessary will it become for patients to come in once a year if they don't even need an Rx for glasses or contacts anymore? The profession of optometry could be forced to shift to a more medical profession, with a little refraction on the side. This may also affect the staffing of a commercial optical.
Let me also add that not every office requires a fresh box of phenol thread every week and fortunately Dr.s decide whether or not they want to use the newest IOP measurements with each patient getting a new tip, or if they want to just use Goldmann. I'm sure we all want the best of the best equipment but economics prevents that. I wager that most optometrist offices have more than enough trial contacts in brands that they never use. I am not extremely familiar with any hospital and their supplies, but I wager that they have some equipment that never gets used, and if they ordered everything that they could possibly ever need, they would go out of business. But to order or request items on a get when you need them basis could lead to catastrophe. For instance if there was a shortage for some reason (recalled supply or just out of stock) or God forbid if a disaster struck and needed supplies where in short stock (such as Haiti.) Perhaps finding the balance is the key, and finding that balance is what makes a good business man successful.
Just a few thoughts, hope they were contributary. :)
Robert,
Thanks for your post.
The supply chain model that I suggest can either be taken as a whole concept of a profession or of a vertical market. However, I was applying the supply chain model to an individual organization like an optometry office.
The concept that I suspect may make office planning more simplified is to imagine how you will fulfill an order and then work backwards. This kind of office planning will drive how your office will be designed, the kind of services and products desired.
Most people think about their office by saying I'm going to be offering these services and then trying to plan their office. It's not wrong, but considering supply chain theory may save headaches that crop up.
Answer This Question