One of the most important factors that businesses can consider when it comes to improving their customer satisfaction and profitability is the supply chain management process. This process involves managing the various steps involved in the production and distribution of their products. Aside from being a core part of many businesses, it’s also important that customers and employees have a good understanding of the various processes involved in the supply chain management process. This article aims to provide a list of key terms that both parties should be familiar with.
Common Supply Chain Terms
- Back Ordering: One of the most effective ways to improve the efficiency of your supply chain is by implementing a back-ordering process. This process involves placing a purchase order for a product that’s out of stock in your warehouse. It can be used during times of high demand or when a slow-moving product suddenly gets in demand.
- Logistics: Although both supply chain management and logistics are commonly used interchangeably, logistics focuses on the transportation and warehousing aspects of a product’s journey. It involves the various steps involved in moving a product from one place to another. Due to the rise of e-commerce, logistics have become more important for businesses. With the ability to deliver goods to their consumers in a timely manner, many companies are now turning to supply chain management to improve their efficiency.
- Cross Docking: A cross-docking process is a method that enables business owners to ship their goods to their customers with minimal storage space. Cross-docking is a process that involves using a single dock or platform that has the necessary access to both the unloading and loading areas. It can be used to split the goods into groups and then load them into another truck for delivery.
- Supply Chain Sustainability: The concept of supply chain sustainability is a framework that aims to address the various aspects of the supply chain. It involves analyzing the various factors that affect the environment and human rights. Some of these include deforestation, air pollution, and waste. The goal of this framework is to help businesses develop and implement sustainable practices that are designed to promote their positive brand awareness. Some of the ways that companies can improve their supply chain sustainability include identifying areas of their operation that are prone to environmental damage, setting goals, and working with other sustainable providers. Aside from these, organizations can also hire external supply chain experts to help them implement policies and procedures that are consistent with the framework.
- Carnet: A Carnet is a legal document that allows companies to temporarily export certain products to another country and then re-import them back into the US without paying duties. This document can be accepted in over 80 countries and covers most types of goods.
- Drop Shipment: A drop shipment is a type of arrangement where one of your vendors delivers goods to your customers on your behalf. This method allows you to make money while still maintaining a high level of customer service. It’s ideal for selling slow-moving items, as it eliminates the need for storage and maintenance.
- Inventory Management: One of the most important factors that businesses can consider when it comes to improving their inventory management process is controlling the number of goods and materials that they have. This process can be carried out through the use of software that allows them to keep track of the various details of their products. Various techniques and methodologies can also be used to improve the efficiency of your inventory management process. These include stock review, just-in-time, and ABC analysis.
- Bill of Lading: The Bill of Lading is a shipping document that shows the details of a goods’ journey, such as its type, destination, and quantity. It’s also used whenever a shipment is transported from one place to another. This document has to be signed by all the involved parties, including the buyer and seller.