Supply Chain Management Hierarchy

The supply chain of an organization includes all the inbound entry of raw materials or resources and the outbound exit of finished products to other members of the distribution channel known as channel partners. It must be noted that the supply chain management hierarchy is structured with a view to ensure greater clarity in the traffic not only of the resources but also of information.

To establish a failsafe supply chain, the scale of production, the corresponding demand patterns, prices and a wide gamut of other parameters need to be taken into account. All channel partners and market conditions greatly influence the supply chain strategies of an organization.

The supply chain management hierarchy ensures proper delegation of roles and responsibilities at various levels in accordance with the organizations’ line of business. For instance, the supply chain strategies of a modern trade retail giant would be quite different from those of a large FMCG company. In this regard, the chain of command can be broadly categorized under the following three hierarchical levels as follows:

Supply Chain Management Hierarchy

I.  The Top/Strategic Level

This particular hierarchical level is involved in taking the long term decisions. These decisions are related to the quantity of materials to be ordered in line with the production capacity of their manufacturing units, the frequency of order batching, inventory levels, transportation facilities and so on. The job titles under this level are:

  • Location Manager
  • Financial Manager
  • Maintenance Manager
  • Quality Analyst
  • Manager, Inventory
  • Distribution Analyst

The personnel under this hierarchy are engaged in determining the plant location and networking system so that the right quantity of resources can be availed in the right time in a cost effective manner.

II.  The Middle/Tactical Level

This supply chain management hierarchy takes short term decisions regarding weekly demand forecasts with the help of primary and secondary market data, trend analyses, etc. Here, activities of production planning and planning of material requirement are also carried out by choosing the right linear programming software. The job profiles under this hierarchy are as follows:

  • Production Planner
  • Material Resource Planning or MRP In-Charge
  • Research Executive
  • In-Charge, Project Planning
  • Transportation Supervisor
  • Technical Supervisor

III.  The Executive/Operational Level

This hierarchical level is concerned with the ultimate execution of the supply chain strategies at the floor level as communicated and directed by the preceding hierarchies. The activities are carried out on a daily basis with the strict objective of order fulfillment, the titles being:

  • Operations Executive
  • Warehouse In-Charge/Supervisor
  • Logistics Executive
  • Tech Support Executive
  • Maintenance Executive

It must be noted that certain companies club the operational and tactical levels to condense the supply chain activities and reduce the maladies of the bull whip effect.

The supply chain management hierarchy deals with strategies of order batching or distribution and communicates them to the tactical and operational levels for efficient implementation.