Industries have learned the value of supply chain management in the past half of a century. There was a time not too long ago when a company would buy and stockpile mounds of all the raw materials they needed to keep their production lines running. This stockpile could run for months which was good that a company could keep production operating but bad that so much capital was invested in those stockpiles. However, with new ideas on the foundation of new technologies it is possible that companies can manage their supply chain while keeping capital liquid. It is even conceivable a company can order raw materials, run it through production, sell it, and get paid before their thirty days net is up on the raw materials order.

In supply chain management the newest buzzword is Just-In-Time inventory (JIT). That is when a company orders what they need as they need it. It arrives in a timely manner so production keeps running. What this eliminates is the need for any surplus; surplus translates into tied up capital. Just-In-Time inventory is made possible by telecommunications which allows for online ordering. Another advent that makes this possible is the changes in shipping. With carriers like UPS and FedEx it is possible to ship small amounts cheaply and quickly. As an example say a piece of machinery needs a belt. There was a time when the factory would have to stockpile a case load of belts for two reasons- one, the belt manufacturer could not afford to sell a single belt at a time, and two, it would be difficult to receive a replacement part in a timely manner. So, it was easier to keep a case of contingency parts around.

Now, it is easier to order as needed knowing that a company doesn’t need to stockpile as it once did.

To keep the modern supply chain flowing it does take understanding of the three points of production. The first is the ability to keep the purchasing department well informed of inventory, so that they can keep products and materials flowing when needed. The second point is production which will need attention from all supporting departments to keep the production lines operating. The third is shipping and receiving which has need to keep materials flowing to production and finished products onto trucks.

What makes all this possible from ordering to production to shipping is communication and material handling. While technological advances in telecommunications gets a lot of press and is an obvious assist to supply chain management, it is material handling which deals with the real world.

There is a lot that modern material handling can do to help keep a company’s production moving. New protocols with old and new equipment can help in ordering materials Just-In-Time for production. Obviously on the production floor, quality equipment can help not only with speed but supply chain efficiency. Then there is the last distance from factory floor to out the door where material handling can help make shipping a speedy endeavor also. Therefore, any review of supply chain management should also include a review of current material handling needs and procedures.