5 Easy steps of Supply chain management – From Analysis to Supplier Selection

Are you searching about supply chain management? You are at your right place. We will tell you what is supply chain management? We will then discuss the concept of is Sourcing and Purchasing.

Then we discuss the 5 easy steps of supply chain management. Firstly, we discuss What is Supply Analysis? How to manage supply of products? For all that answers we select a supply of Rubber tires. We prepare a guide regarding the decisions for Managing the Supply Side of Rubber tires. Let’s start!

What is supply chain management (SCM)?

Are you wondering what is supply chain management? SCM is the short form of supply chain management. You can say in this form;

S: Supply

C: Chain

M: Management

Basically, the SCM is the management of goods, products or any services. This management includes all its buying process, product manufacturing process (from raw material to product) storing process, and selling process.

Supply chain management simplify the operations (supply operations) of the companies and increase customers values. SCM specially design efficient supply chain to achieve the cheapest feasible supply.

The concept of Sourcing & Purchasing

Before starting about supply chain management (SCM), it is important to discuss the sourcing and purchasing. Sourcing is the procurement subset which precedes any transactions.

There is another concept we should tackle which is strategic procurement. Strategic procurement is commonly a method that develops supply chains with the highest value and not just the lowest selling price. Sourcing brings importance to the purchasing cycle:

• Strong partnerships with suppliers maintain high consistency and availability
• Contracts between vendors and sales orders set down conditions and remove possible misunderstandings.
• Companies with the most mature cooperation with manufacturers exceed their rivals by a double margin.
• Purchase orders are government forms given to the vendors and legally binding arrangements until approved.
• Purchase orders specify the products to be purchased at any price point by a customer.
• The sales order frequently specifies the arrival date, shipment plans and payment conditions, among other information’s (Khalife, 2020).

Sourcing is, like buying, a subset of procurement. In particular, sourcing finds the most cost-effective provider of the goods while buying manages the transaction process for the acquisition of the goods and services.

Natural Rubber:

Rubber trees supply natural rubber which is re-milled by plants, which wash it by removal of impurities such as leaves, insects and dirt and mix to maintain durability. They are then dried and wrapped before being marketed as smoking rubber sheets or rubber balls.

The automobile industry is one of the biggest segments in this country. In the Asia Pacific area, natural rubber markets have traditionally been based. Players in this sector generate and sell as raw material or finished products to other nations.

Here are the four easy steps of the Supply chain management! Let’s look at them:

Supply Analysis for Supply chain management

The very first step for the supply chain management is the Analysis of Global Supply/Demand Figures for product. Here we take Natural Rubber as the product. Global demand for natural rubber will rise by 4.8 per cent (2019-2023), and output is expected to reach ~17 MMT (MMT) by 2022, from the current level of 12.43 million MT.

Demand for natural rubber supply for Thailand and Indonesia is projected to increase on the car industry. On the other side, the Malaysian natural rubber demand would expand as latex items such as condoms and gloves increase.

Natural rubber, also known as India rubber or rubber, as originally produced, consists of organic isoprene polymers with small impurities and water for other organic compounds.

The prototype of all elastomers is natural rubber. The latex rubber is collected in a sequence of phases that include processing, concentrating, clotting, disinfection, drying, washing and mixing. It is marketed in a range of degrees depending on purity (color and the lack of alien matter), viscosity, viscosity stability, oxidation resistance, and cure rate due to its natural derivation.

Firstly, the natural rubber industry is comparatively divided by producers with regard to industrial structure research, although clustered by regions. In this market, a number of suppliers range from major multinationals to tiny private businesses.

Regional, Thailand is the largest region of natural rubber manufacturing, with about 30.41 percent market share of international production in 2016, and is also a pioneer in the entire natural rubber sector.

The major development areas are Indonesia, Vietnam, Malaysia, China and the Indians in turn. Secondly, by the end of 2016, the global rubber supply hit 13030,2 K MT, with annually growth rates of approximately 2-3% in recent years.

Thirdly, according to our report, the world’s natural rubber industry is worth more than USD 26,6 trillion in 2016. The framework may be categorized based on automobile, medical, manufacturing and consumer products end-users.

Automotive usage is traditionally about 65.74 percent of the total use whereas the use of consumer products is more diverse. The growth of medical usage in general will continue to rise in the next few years, as demand in both industrialized and emerging areas would increase.

Fourthly, the central element in the output of natural rubber producers for price pattern study is downstream consumer demand.

The demands in industrialized countries are mostly moderate whereas in emerging countries the demands are growing rapidly. China is the biggest natural rubber consumption country to cross 3530 K MT in 2016, led by Europe and the United States.

Fifthly, the import and export activities of natural rubber are regular for trade research and the leading exporter is Thailand and Indonesia. The import industry is frequent in China and local demand for high-end goods cannot be satisfied. However, overcapacity increases year after year.

Sixth, the global natural rubber sector is projected to continue to increase at an annual growth pace of 2~3 percent and a little faster in China.

We prefer to think that the market is already overcapacity and demand is growing smoothly. With regard to retail costs, the steady decreasing trend in recent years will continue in the future, with rivalry escalating, the market disparity between the various brands will decrease. Similarly, the profit margin can fluctuate.

Future Expectations on Price

Yeah! The future expectation of the supply product is the second step of the supply management. It is the most important point to be consider when doing supply management. Let’s have a look at the future expected price of natural rubber:

• Thailand is expected to supply 4,65 million MT of natural rubber with a supply share of 37 percent at a CAGR of 4,5 percent by 2022.
• Only 14% of natural rubber is consumed domestically in Thailand but remains among the most suitable areas of supply since high rubber content is supplied in the field and low prices are incurred.
• Asia remains the predominant provider for NR (Natural Rubber), as the yield region and average yield in as shown countries such as Thailand, Malaysia and India rise.
• Emerging NR producers including Cambodia, Ivory Coast, etc. are expected to highlight potential rivalry,

• The natural rubber price outlook suggests that with downstream production, losses on the TOCOCM markets and the ITRC export curbing scheme are being weakened; continuing supply constraints will curb more price drops. (Rohlwing, 2021).

Opportunities and Challenges for Supply chain management

What to consider in supply chain management? Ahhhhhhh! I don’t know about my product future challenges. Is it will be helpful? Or it will be challenging for me. For natural rubber as a supply product, we discuss the opportunities for buying and selling.

Opportunities: Shifts in pneumatic industries to low-cost development countries are projected to create new avenues for pneumatic expansion, while growing NR market share.

Challenge: supply shortages, after 2020, due to a decline in plantations after 2014 would raise questions about the reduced supply production.

Listing of Global Suppliers and Buyers

So, the next step is to make a list of suppliers and buyers of natural rubber. It helps in the supply chain management. Let’s have a look at the suppliers and buyers of natural rubber!

Suppliers

This table includes important statistics about the top rubber manufacturers in the USA, measured by annual revenue, listed on Thomasnet.com. Further information about each business is included, such as the office location, organization category and short company summaries. This is how we do supply chain management:

Top Rubber Suppliers of natural rubber

Buyers

How to do supply chain management? Simple answer is do enlist the buyers of product and select one from them.

BB Enterprise

We are a raw material merchant of the BB Enterprise, reclaimer of rubber, refining of tar, carbon powder, natural rubber, silicone emulsion, and zinc oxide. For more information you can visit their website:

OBBS LTD

OBBS LTD is popular for the finest Latex gloves. These gloves have effective defence and are widely used to shield wearers from viruses and bacteria. It is constructed of natural rubber and offers a flexi. They are Importers of Health Importers with Nitrile Gloves. For more information you can visit their website:

Global Holdings for Intertrade

The natural rubber brand rubber export business. For more information you can visit their website:

TOYESE International Recycling Projects

TOYESE Recycling Ventures International is a Nigerian recycling firm with a global waste management perspective. For more information you can visit their website:

Senegal

The goods are sold Coffee.

For more information you can visit their website: https://en.wikipedia.org/wiki/Senegal

Jimolda International Company Ltd.

Jimolda International Company Ltd is a company that is associated with several suppliers and buyers of various commodities and finished products. We aid vendors to find the correct purchasers in other countries including pride rubbers. For more information you can visit their website:

1. Supplier Selection Criteria

This is the most important step for supply chain management. The mechanism through which companies discover, review and negotiate with suppliers is the procurement of suppliers. The selection method for suppliers employs a huge number of financial capital and is vital to the survival of every company.

The key aim of the selection process is to minimise buying risk, increase the buyer’s total value and establish near and long-term relationships among consumers and sellers (Taherdoost, 2019). Criteria provide characteristics that a purchasing company values in its agreements with suppliers. In no structured order are eight standard selection requirements for suppliers:

Capital value

If you are a start-up, affordability may be a primary factor when selecting a provider. But inexpensive vendors aren’t necessarily the right option for capital. If you want the suppliers’ loyalty and consistency, you may have to consider how much you are prepared to spend. The balance between expense, reliability, quality and service is critical.

Quality and confidence

The consistency of your supplies has to be consistent – the clients, not the suppliers, combine bad production for you. Likewise, if your supplier allows you to receive late delivery or defective goods, you can dismiss your client.

Clear connectivity and strong service

In order to ensure a successful working relationship with your supplier, communication is crucial. Your provider can collaborate frankly and consistently from the first briefing by continuous feedback and routine meetings. You ought to supply the vendors on schedule, or to be fair and advise you if they can’t.

Stability of the finances

It is still worth ensuring that the provider has enough cash balance to supply when you need it. A credit review will ensure you that while you need them most, they will not get out of service. Some other are as follow:

Conclusion

Many organisations are willing to plan and carry out a strategic supply chain management and find savings (at least on paper). Although, in my view, few firms have a traditional, reliable implementation strategy a method for converting paper savings into basic advantages.

With regard to the overall life cycle of suppliers, strategic procurement and supply chain management is just a third of the initiative. The balance is provided for in the implementation of signed arrangements and the management of supplier ties between procurement activities.

These two tasks are probably far more complicated and demanding than the method of sourcing itself since they require dynamic partnerships and systemic transformation. A mechanism to incorporate guidelines produced by supply chain management processes is needed.

Recommendation

We should utilise the following approach to achieve supply chain management with businesses.

• Think Globally, Act Globally

Globalization has largely induced the increased value of procurement within the ordinary company. While many business professionals have been looking internationally, now is the moment to begin to do so.

To achieve supply chain management, pros need to build and/or access wide awareness of the industry. Many of Western suppliers’ revolutionary manufacturing advantages have shrunk or fallen as the global supplier industry erupted.

Sourcing teams cannot afford to mismanage or improperly maintain their classes, since value depreciation will fall quite quickly through the products and services of their enterprises.

Our recommendation for supply chain management is to start with a category and personnel capacity evaluation, to index and priorities the management of the skills and expertise of an enterprise.

• Adopt the eSourcing

The theory of eSourcing 2.0 notes that any supplier agreement resulting in a deal can leverage a source approach for negotiation. Although we agree that all variety of channels are suitable for eSourcing 2.0 as a strategy, an eSourcing approach is obviously more useful for experienced sourcing practitioners.

This strategy does not require any offer to be successful, as a reminder. The usage of the platform can therefore be used to collect final criteria and bid details. Users can identify their preferred procurement strategies – reversing auction, sealed bids, one-on-one negotiation etc.

An eSourcing 2.0 mentality will quickly trace any transformation in procurement and has the largest, broadest and longer-lasting advantages of virtually any plan which may be implemented this year or at any point during the next five or ten years (Nair, 2012).

• Assess the dealer demand

If you have a strong view of the type of good or service, the next move is to analyse the supply demand carefully. This supply chain management steps offers you an insight into who the big actors are, the underdogs, their respective dynamics, the industry patterns and other best practises.

In addition, you can prepare a “should-cost” survey at the same time. Although such a study will not necessarily be vital in all situations, a paper of this kind is usually advisable.

• Maintain free contact networks

You each have something new on the table for each part of the supply chain management, strategic procurement team and you would use both their insights and skills to make the correct choice. Stay linked and work together to face new problems.

• Think over the price tag

Strategic sourcing is at its best if decision-makers aim to improve operational efficiencies, recognise low-level providers, standardise global alliances and navigate partnerships which lead to fast and transparent ROIs. The aim is not to cut prices, but to maximise efficiency, benefit and growth.

• Regular evaluation of strategic suppliers

Have the strategic procurement unit together on an ongoing basis. Know your seller and open the comment chat. What does the relationship work? How does the latest supplier deliver? What went well in the course of sourcing? Will the method be better? Where is the next period space for improvement?

• Issue the correct application at the right moment

The acquisition departments use three main applications to classify possible vendors. They are details requests (RFIs), proposal requests (RFPs) and quote requests (RFQs). To collect the knowledge, you need and at the same time contacting prospective suppliers efficiently and effectively is key to knowing while making clear supplier demands during the RFX phase.

• Conduct your research on the past and expertise of possible vendors

To provide the company with supply chain management, you need the correct suppliers, you have to be prepared to dig up and do some analysis. A surface-level assessment may lead to an unsatisfactory or improductive seller partnership.

• Ask the correct questions to get the best answers

For supply chain management, the collection of knowledge is really the method of identifying the supplier that better addresses the problems. Who will assist you in navigating? Will they improve efficiency when reducing costs? Can they unlock the organisation’s new doors? May they use efficiencies to reduce the schedule?

They are all fantastic objectives when searching for potential strategic suppliers. Don’t forget the business strategy for supply chain management of the organisation. What you intend to do in supply chain management, selecting a new partner should go hand in hand with where the company leads. When the strategic supply team aligns your questions with the larger objectives, progress is on the horizon.

References

Cavallo, C., 2020. Top Rubber Manufacturers and Suppliers in the USA. Thomasnet.

Khalife, S., 2020. Procurement, purchasing and sourcing— what’s the difference?. Paramountworkplace.

Nair, R., 2012. 3 RECOMMENDATIONS FOR SOURCING PROS IN 2012. Procurement Technology.

Rohlwing, K., 2021. Natural rubber prices are rising. Running Green .

Taherdoost, H., 2019. Analyzing the Process of Supplier Selection Criteria and Methods. Science Direct.

Hope so you now know 5 Easy steps of Supply chain management. This will help you in supply chain management jobs. Best of Luck!