Tuesday, 13 December 2016

What are the four processes of provisions? – Part 1

Over the next couple of days we’re going to take a look at the four key logistics functions that present in one company.  

Order Taking and Forecasting Demand

Order taking involves receiving customer orders in the product line of the supply chain. The orders need to be checked to make sure it is possible for the manufacturers to complete and that they meet the financial guidelines. They also need to give a response to the customer, letting them know that the goods are available or can be made order, the price of the order and the delivery promise.

The order is often performed by an electronic message and this is preceded by the order forecast. Checks are made by the manufacturer to ensure the customer can pay, which is usually performed by a computer program. When the order has been received multiple steps need to be taken to give the products to the customer. There’s a lot of variety in the orders depending on the sale type, if the customer is an individual or a company and if the product is a customised item or a commodity. Forecasting demand isn’t an operation function, but it is normally included so it’s possible to estimate the potential number of orders. 

Fast response is considered to be a key factor in decent provision of goods, and forecasts are needed to give the producing firm the information it needs when it can’t make goods in an acceptable time period after an order has been received. Many firms use a mix of actual and forecast orders and the customer relies on forecasts more.  The forecast is made by the past order patterns and the forecast accuracy is calculated too.  
Provisions are the processes of the purchase, produce, dispatch and serve. The purpose of the provision is to perfect the flow by incorporating each of the activities that make up sourcing materials from upstream so the products can be made and delivered to the next link in the supply chain.  Purchasing processes need:

  • Appointed several companies that are able to provide the component parts and raw materials
  • Able to receive the materials and the components on time
  • Evaluate the suppliers to make sure they achieve the deliveries as promised
Many firms work out blank orders with suppliers for one year and the operators inform suppliers of actual quantities and the different material types each day. This running relationship depends on finding potential companies and negotiating commercial relationships. The second process is production and this is all the different steps that are taken to change the raw materials and components into a finished product. 

No comments:

Post a Comment