The companies make operational decisions daily to ensure the efficient flow of the materials in the supply chain. Operational supply chain decisions are made hundreds of times each day in a company. Here are the various operational decisions taken by the companies and effects of those decisions on the supply chain:
- A crucial activity for planners is to decide when to place an order, for this there are a number of reorder methodologies which can be adopted. Most companies use computer systems for materials requirement planning (MRP).
- Most of the companies are trying to lower the operational costs and this can be done by the drop shipments which is a process where companies can reduce the need to keep inventory in their warehouse, lower their overall shipping costs and improve customer service.
- Cycle counting is a sampling technique used to count inventory where count of a certain number of items infers the count for the whole warehouse, and it is used to count a number of items in a number of areas within the warehouse and reduces the efforts without having to count the entire inventory.
- The other method used in warehouse is order picking where a small number of goods are taken from a warehousing system, to satisfy a number of independent customer orders. Picking processes have become an important part of the supply chain process.
- MES (manufacturing execution systems) is used to increase productivity, control costs and manage the day to day operations of the shop floor. Operations managers can sometimes be reactive and not proactive to the issue that arise with maintenance on the shop floor.
- Small manufacturers who cannot afford ERP systems have been turning to low cost systems to help with their fast growing operations.
All the above effects reveal how crucial are operational activities in supply chain management.
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