Supply Chain Management Essay Example | Topics and Well Written Essays - 1750 words

Supply Chain Management - Essay Example In order to ensure that the production process is strategically aligned to the supply chain, it must be aligned to market demand. For this reason, organizations undertake the process of production planning and scheduling which involves optimizing the output level. This is the output level that takes into account sales and production capacities of the company. Production planning and scheduling enables the management to organize the production facilities in such a manner that they are able to capitalize upon customer wants and market demand to the highest possible extent (Grimson and Pyke 325). Because customer wants change and market demand fluctuates, production has to be flexible. For this reason production planning and scheduling is a key success factor when it comes to building and maintaining a competitive supply chain. As mentioned before, production involves a transformation process from raw materials to finished goods. Production involves managing this transformation in such a manner that production capacities are capitalized upon to the best extent possible taking into account market demand. For this reason, production planning and scheduling are related to strategic decisions. ... Therefore the management has to invest in production equipment that not only incorporates the latest technology, but can also produce goods according to total quality management. Production planning and scheduling enables the management to meet the objective of maintaining state-of-the-art production facilities which can meet market expectations. Production ensures product availability according to forecasted sales. When the customer order is received, the production process must start immediately. Production planning ensures that the required production capabilities are maintained in the long term. Production scheduling ensures that the optimum volume of output is available in order to maximize the profitability of the company. Supply Supply can be defined as the process of defining the balance between capacity and quality. When considering supply, the management must assess whether the production facilities are able to maintain product quality that maximizes company profitability. As mentioned before, the production process must occur according to market demand. This ensures product availability. However this incorporates quality as well. This is taken into account in supply considerations. In this case, the management considers whether the company’s production facilities can meet the quality requirements economically. If it takes too much investment to ensure quality, then this drives up the cost of supply and therefore profitability is reduced. So considering supply forces the management to take into account the production capacity for ensuring product availability at the lowest possible cost. As mentioned before, production is the transformation from raw