Explanation of different drivers of supply chain management
The drivers of the supply chain management are helping to determine the performance of this. The drivers of the supply chain management divided in two parts one are logistical drivers and second one are cross functional drivers.
A. Logistical drivers
- Facilities: this is the physical location where accompany want to store the goods and the production. There are some of the major types of the facilities like production sites, storage sites. For centralizing, the facilities economies of scales used so that efficiency of supply chain management can be increased.
- Transportation: transportation in the supply chain management is referring the mode or the routes of moving the inventory through the supply chain. If the transportation system is faster, than it ensures the firm’s responsiveness. This support firm as competitive advantages. There are so many different ways of transportation are available, and this is depending on the forms that which is chosen by that for them. Transportation includes road, railways, sea water, pipelines, and airways. Other than this electronic transportation are the fastest and the efficient mode of transportation.
- Inventory: inventory means the stock and that consisting of the raw material, work in progress, finished goods. If there is any change in the policy of the inventory, it largely affects the responsiveness of the supply chain. Three basic decisions are to be taken by business regarding inventory are, cycle, safety, and the seasonal safety decisions.
B. Cross functional drivers
- Information: this connects the various supply chain partners, and thus allows them to coördinate with each other in terms of activities. Information is the crucial things on the each stage, and it can delay the operations. A good information system of the organization can enable a firm to get a high variety of customized products to the consumer.
- Sourcing: this is the process of the purchasing the material that required for the production of the final products.
- Pricing: in this organization determines the charge of the final products that will be charged to the customer.