Performance of the supply chain can be determined with the help of the drivers. The drivers of the supply chain consists of three logistical drivers and three cross functional drivers.
(A) Logistical Drivers
Facilities:
Facilities are the physical locations where the products stored or assembled. The major types of facilities are production sites and the storage sites. Economies of scales are used in centralization of facilities to increase supply chain efficiency.
Inventory:
Inventory consists of the raw materials, work in progress and the finished goods. Changing inventory policies can largely effect the efficiency and the responsiveness of the supply chain. 3 basic decisions to be taken by the business regarding inventory are, cycle, safety and the seasonal inventory decisions.
Transportation:
Transportation refers to the modes and routes for moving inventory throughout the supply chain. Faster transportation ensures more responsiveness but less efficiency of supply chain. Transportation supports a firm's competitive strategy. The different ways of transportation includes rail, road, sea water, pope lines and the air ways. Electronic transport is the fastest and the efficient mode of transportation. Transportation decisions includes mode, routes and in house or outsourcing the transportation.
(B) Cross functional:
Information:
Information connects various supply chain partners and allows them to coordinate activities. Information is crucial to the daily operations at each stage of the supply chain. An information system can enable a firm to get a high variety of customized products to customers rapidly and to understand the changing customers tastes and preferences.
Sourcing:
Sourcing is the process of purchasing the materials required for the production of the final products. Components of the sourcing decisions are the evaluation and the selection of the suppliers, in house or outsourcing.
Pricing:
Pricing involves determining the charges for the goods or services offered by the manufacturers. The price of the product effects the buying patterns of the customers thus effecting the supply chain performance.
All the above stated drivers are very crucial in determining the success of the supply chain management process.
(A) Logistical Drivers
Facilities:
Facilities are the physical locations where the products stored or assembled. The major types of facilities are production sites and the storage sites. Economies of scales are used in centralization of facilities to increase supply chain efficiency.
Inventory:
Inventory consists of the raw materials, work in progress and the finished goods. Changing inventory policies can largely effect the efficiency and the responsiveness of the supply chain. 3 basic decisions to be taken by the business regarding inventory are, cycle, safety and the seasonal inventory decisions.
Transportation:
Transportation refers to the modes and routes for moving inventory throughout the supply chain. Faster transportation ensures more responsiveness but less efficiency of supply chain. Transportation supports a firm's competitive strategy. The different ways of transportation includes rail, road, sea water, pope lines and the air ways. Electronic transport is the fastest and the efficient mode of transportation. Transportation decisions includes mode, routes and in house or outsourcing the transportation.
(B) Cross functional:
Information:
Information connects various supply chain partners and allows them to coordinate activities. Information is crucial to the daily operations at each stage of the supply chain. An information system can enable a firm to get a high variety of customized products to customers rapidly and to understand the changing customers tastes and preferences.
Sourcing:
Sourcing is the process of purchasing the materials required for the production of the final products. Components of the sourcing decisions are the evaluation and the selection of the suppliers, in house or outsourcing.
Pricing:
Pricing involves determining the charges for the goods or services offered by the manufacturers. The price of the product effects the buying patterns of the customers thus effecting the supply chain performance.
All the above stated drivers are very crucial in determining the success of the supply chain management process.
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