It is important for every organization to adopt a unified Supply Chain Management strategy which takes into account all the processes that affect supply chain. The concept of "supply chain" pertains to the system of distributing raw materials to their intended destinations in a timely fashion to fulfill demand. A wide variety of activities take place throughout the supply chain, including product development, sales and marketing, logistics, and manufacturing. Although many of these activities are inter-related, few are directly affected by each other and need to be coordinated and managed with a view toward achieving specific business objectives. For instance, in a manufacturing facility, assembly and testing activities are normally conducted in separate locations, while actual product development is carried out in-house using simulation technologies.
The idea behind integrating supply chain applications and real time inventory management is to create a platform that allows organizations to easily observe and measure entire activity during real time, thereby enabling executives to make decisions based on real-time data. Quick Changeover provides inventory managers and other decision makers with real-time information on inventory levels and associated demand, so they can proactively manage inventory bottlenecks and identify opportunities for increase in capacity utilization. The concept is also meant to improve customer satisfaction and maximize return on investment (ROI), which in turn can boost gross and net profit margins. An effective Sales & Operations Planning methodology and Lean Six Sigma techniques like Value Stream mapping, Quick Changeover and Kanban systems can help an organization to maximize its inventory investments and achieve a positive effect on its bottom line while ensuring customer service targets are being attained.
In value stream mapping, an organization identifies a set of problem or opportunity areas and then proceeds to develop strategies for overcoming those challenges. The concepts of Kanban and Quick Changeover apply to manufacturing and to value streams within the supply chain. Both concepts involve the adoption of a comprehensive and interconnected manufacturing strategy and a continuous flow of resources from raw materials through the production process to finished goods. These notions have the potential to help manufacturers to build sustainable business models by removing the risk factors associated with traditional inventory decisions, such as over-supply and under-supply.