Decision Phases in Supply Chain

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Decision phases in supply chain
Successful supply chain management requires much decision to the flow of information, product and funds. Each decision should be made to rise to supply chain surplus. These decision fall in to 3 phases depending on the frequency of the each decision and time frame during which a decision phase has an impact. As a result, each category of decision must consider uncertainty over the decision horizon. * Supply chain strategy or decision

During this phase, given the marketing and pricing plans for a product, a company decides how to structure the supply chain over the several years. It decides what the change configuration will be, how resources will be allocated and what processes each stage perform. Strategic decision made by companies includes Whether to outsource or perform a supply chain function in house, the location and capacities of production and warehousing facilities, the products to be manufactured at various location, the mode of transportation to be made available along different shipping legs, and the type of information system to be utilized. Affirm must ensure that supply chain configuration supports its strategic objective and increases the supply chain surplus during this phase. Design decision are typically made for the long term(are matter of years) and are very expensive to alter on short notice. * Supply chain planning

For decision made during this phase, the time frame consider is quarter to a year. Therefore, the supply chain configuration determine in the strategic phase is fixed. This configuration establishes constraints in which planning should be done. The goal of planning is to maximize the supply chain surplus that can be generated over the planning horizon given the constraint established during the strategic or design phase. Planning includes making decision regarding which market will be supplied from which location, the sub contracting of manufacturing, the inventory policy to be followed,...
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