Factors Influencing Supply Chain Design Decisions

Before designing a supply chain, it is important to understand what a supply chain is and why it is important for any firm. To put it in simple words, a supply chain is a process that starts with making a product and ends with selling it to clients. The supply chain encompasses all processes, from obtaining raw materials to delivering completed items. Information is another critical component of supply networks. Aside from items moving from one end to the other, information must also move quickly in both directions.

Supply chain management is critical since any problems in this function can lead to poor product quality and a scarcity of raw materials and completed items. The issues can also lead to a delay in delivering goods to clients. All of these factors might have an impact on the company’s profitability and reputation in the market. In a competitive market, businesses must seek methods to save costs while meeting consumer delivery needs. To achieve supply chain efficiency, the supply chain design must be flawless.

The process of making crucial decisions regarding the various aspects of the supply chain is known as supply chain design. A good design will make the process go smoothly and benefit the firm. A supply chain consists of different parts, each of which must be at the proper location for the organisation to profit from them. A good design aims to improve the flow of commodities and ensure optimum efficiency. Several elements will impact the design’s creation.

For different requirements, the experts have designed 8 supply chain models. These are:

• • The Agile Model
  • The Continuous Flow Model
  • The Flexible Model
  • The Fast Chain Model
  • Responsive Models
  • Efficient Chain Model
  • The Custom Configured Model
  • Efficiency Oriented Models

These models offer several advantages since they can adjust their stocks and production patterns to match changing client needs. However, these models also come with various disadvantages. They rely significantly on their staff’s forecasting abilities to foresee trends. If personnel are not thoroughly trained for the task, they may make costly mistakes that may go against the organisation. These models need a significant amount of human interaction. This can result in instances of human mistakes.

To create a supply chain network design for any organisation, several factors must be considered. These are:

Set goals and objectives, and gain buy-in

It is critical to have a clear understanding of the organisation’s goals and an honest appraisal of the time, effort, and cost. Supply chain network design is not an isolated activity; it must encompass all functions involved in the purchase, manufacturing, sales, and delivery of goods. It is vitally critical that the CEO and the board commit at the highest level. A pilot project that considers one aspect or section of the organisation may be required to illustrate the advantages of supply chain network architecture.

Creating a competent team for supply chain network design

Aside from high-level backing, SCND’s success is dependent on assembling a team with the necessary expertise, abilities, and commitment to carry the project through. At the absolute least, a full-time project leader and a small project team comprised of persons who together have a solid understanding of the supply chain, the organisation, and a vision of what they want to achieve are required. When necessary, key executives and supply chain workers must also be involved.

Defining the existing supply chain design

The first objective is to thoroughly define the existing supply chain network. This is a crucial, though time-consuming, procedure. The degree of information necessary varies depending on the sort of domain. However, it’s best to work with the most detail feasible because it implies fewer mistakes. Item, supplier, location, pricing, distance, shipment method, and restrictions such as capacity, lead time, and flexibility are all typical pieces of information. Begin with the material list. Much of the necessary data will be available in the organisation’s MRP and ERP systems.