The Importance Of Supply Chain Relationships

782 Words4 Pages
Managing customer and supplier relationships is an important issue of handle supply chains. The concept of closely aligned relationship has been considered the basic needs of supply chain management. However, supply chain relationships, particularly those involve in product flows, reveals that the central of these relationships is inventory movement and storage. Most of the activity involved in managing relationships is based on the purchase, transfer, or management of inventory. Thus, inventory in supply chain plays a critical role because it is a salient focus of supply chains. Perhaps the inventory play the most fundamental role in supply chains is to make it easier the balance of demand and supply. In order promote and effectively manage the forward and reverse flows in the supply chain, company must deal with upstream supplier exchanges and downstream customer demands. This puts an organization in the position of trying to find a balance between fulfilling the…show more content…
The main purpose of S&OP is to bring the demand management functions of the company like, sales forecasting, marketing together with the operations functions of the company (for example, manufacturing, supply chain, logistics, procurement) and level strategic plans. This always involves discussions about the company’s inventory in hand, inventory in-transit, and work-in-process. Such discussions allow the sales and marketing department staffs to adequately plan for the forthcoming time horizon by gaining a realistic picture of the inventory levels available for sale. Additionally, the operations staffs are able to get updated and direct sales forecasting information, which can help in planning for future inventory needs. Such information may very from result in shifts in manufacturing plans or change to procurement needs because of the decision to focus on specific units of inventory instead of others in the near
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