Firstly, to optimize a Supply Chain one must be clear in defining it and understanding its intricacies.Secondly one must clearly understand the Goals and Purpose of the Supply Chain, on essence its Mandate.Thirdly, Vision and Mission, create one, you will need it!

You must understand that Supply Chains are dynamic mechanisms that require intense Systems Thinking Acumen.

Systems Thinking is a methodology of Strategic Thinking in which one envisions the desired outcome, then works holistically backward, to create strategies to realize one’s vision.Once the above items are identified and understood the following actions must take place:1.)

Leverage the creation of a Strategic Supply Chain Plan such as the following:The above Hoshin Strategic Plan assigns People, Metrics, Targets to a clearly Articulated Purpose2.)

Leverage Operations Research which will focus on the understanding of the interaction of the following components:Process variablesPeople variablesMaterials variablesLayout variablesNetwork variablesMetrics variablesMachines variablesTechnology variablesOperations Research is based on Systems Thinking, or the interaction of the above components to achieve a Desired Outcome or Mission Articulated in the prior table.The primary outcome of Operations Research is to determine the appropriate Systems Settings or how to regulate and configure the above variables to achieve a certain Supply Chain Outcome or Mission.3.

) Leverage some of the following Tools to understand your Supply Chain:Design of Experiments, Predictive Analytics, Prescriptive Analytics, Descriptive Analytics, Spaghetti Analysis, SIPOC Models, Value Stream Mapping, Time and Motion Audits, Network Diagram Analysis, Critical Path Analysis, Chi Square, Hypothesis Testing, Control ChartingExample:Value Stream Mapping4.)

Purchasing Departments are responsible for the three critical functions:Management of SpendingSupporting of OperationsProtection of the organization from RiskTherefore, Purchasing Management is the effective Planning, Organization, Leading, and Control of the purchasing function.There are 5 major Purchase Management Department structures:1.

Centralized: In a totally centralized purchasing environment, the only people who place purchase orders are the staff of the purchasing department.

Anyone who needs a product or service for their department must submit a requisition to the purchasing department, where a buyer will create a purchase order.

While this may be favorable in terms of the cycle time involved in placing an order as well as keeping the decision making within the area possessing the expertise about the purchased product or service, it is very unfavorable in terms of control and cost containment.

To keep decisions in the area possessing the expertise about the purchased product or service while also doing a better job of leveraging the organization's volume for discounts, some organizations adopt the lead divisional buying approach.

This structure ensures that Purchasing's labor is spent on strategic activities, rather than tactical activities like placing orders.5.