3 Categories of Supply Chain Management

3 CATEGORIES OF SUPPLY CHAIN MANAGEMENT

i) Strategic

ii) Tactical

iii) Operational

The first category which is strategic level includes building of relationship with customers and suppliers, also, integrating information technology (IT) within the supply chain. It looks at the overall design and the structure of supply chain. This phase is when a company decides how to structure the supply chain over the next few years. It decides how resource will be allocated and what process each stage will perform. Strategic decisions include number, location, capacities of production and size of warehousing, distribution centers, and the modes of transportation to be made available along different shipping legs as well as the type of information system to be utilized. Besides, the product life cycle management must be taken into consideration to ensure new and existing products can be integrated into the supply chain and capacity management activities. It is also vital when companies make decisions for its strategic level, they must look into the uncertainty in anticipated market conditions in the coming years as the decisions are for long term and needs resource commitment. It will cost a lot to alter on short notice.

The second category is the tactical level which involves studying of competitors and making decisions regarding the production and delivery. Decision made during this phase has a time frame of a quarter to a year. It focuses on adopting measures that will produce cost benefits for a company. Tactical level decision is also made within the constraints of the overarching strategic supply chain decisions made by the company management. Decisions are made regarding markets as a given production facility will supply and target production quantities at different locations. In addition, production decisions, including contracting, scheduling, and planning process definition are included in this phase. Inventory decisions which include quantity, location...