4 - Deliver Physical Products

Performing supply chain activities include planning supply chain, procuring materials and services, and managing logistics.

4.0Deliver Physical Products   
4.1 Plan for and align supply chain resources
4.1.1  Develop production and materials strategies   Define manufacturing goals   Define labor and materials policies   Define outsourcing policies   Define capital expense policies   Define capacities   Define production network and supply constraints   Define production process   Define standard operating procedures   Define production workplace layout and infrastructure
4.1.2  Manage demand for products   Develop baseline demand forecasts   Collaborate demand with customers   Develop demand consensus forecast   Determine available to promise   Monitor activity against demand forecast and revise forecast   Evaluate and revise demand forecasting approach   Measure demand forecast accuracy
4.1.3  Create materials plan   Create unconstrained plan   Collaborate with supplier and contract manufacturers   Identify critical materials and supplier capacity   Monitor material specifications   Generate constrained plan   Define production balance and control
4.1.4  Create and manage master production schedule   Model production network to enable simulation and optimization   Create master production schedule   Maintain master production schedule
4.1.5  Plan distribution requirements   Maintain master data   Determine finished goods inventory requirements at destination   Determine product storage facility requirements   Calculate requirements at destination   Calculate consolidation at source   Manage collaborative replenishment planning   Calculate and optimize destination dispatch plan   Manage dispatch plan attainment   Calculate and optimize destination load plans   Manage partner load plan   Manage cost of supply   Manage capacity utilization
4.1.6  Establish distribution planning constraints   Establish distribution center layout constraints   Establish inventory management constraints   Establish transportation management constraints   Establish storage management constraints
4.1.7  Review distribution planning policies   Review distribution network   Establish sourcing relationships   Establish dynamic deployment policies
4.1.8  Develop quality standards and procedures   Establish quality targets   Develop standard testing procedures   Communicate quality specifications
4.2 Procure materials and services 
4.2.1  Provide sourcing governance and perform category management   Develop procurement plan   Clarify purchasing requirements   Establish materials management contingency plans   Match needs to supply capabilities   Analyze organization’s spend profile   Seek opportunities to improve efficiency and value   Collaborate with suppliers to identify sourcing opportunities
4.2.2  Develop sourcing and category management strategies
4.2.3  Select suppliers and develop/maintain contracts   Select suppliers   Certify and validate suppliers   Negotiate and establish contracts   Manage contracts 
4.2.4  Order materials and services   Process/Review requisitions   Approve requisitions   Solicit/Track vendor quotes   Create/Distribute purchase orders   Expedite orders and satisfy inquiries   Reconcile purchase orders   Research/Resolve order exceptions
4.2.5  Manage suppliers   Monitor/Manage supplier information   Prepare/Analyze procurement and vendor performance   Support inventory and production processes   Monitor quality of product delivered
4.3 Produce/Assemble/Test product 
4.3.1  Schedule production   Model and simulate plant   Generate line level plan   Generate detailed schedule   Schedule production orders and create lots   Schedule preventive (planned) maintenance (preventive maintenance orders)   Schedule requested (unplanned) maintenance (work order cycle)   Release production orders and create lots
4.3.2  Produce/Assemble product   Manage raw material inventory   Execute detailed line schedule   Report maintenance issues   Rerun defective items   Monitor and optimize production process    Automate and control plant    Perform advanced process control    Perform real-time optimization    Manage plant alarms and alerts   Assess production performance
4.3.3  Perform quality testing   Calibrate test equipment   Perform testing using the standard testing procedure   Manage quality samples   Record test results   Track and analyze non-conformance trends   Perform root cause analysis
4.3.4  Maintain production records and manage lot traceability   Determine lot numbering system   Determine lot use 
4.4 Manage logistics and warehousing 
4.4.1  Provide logistics governance   Translate customer service requirements into logistics requirements   Design logistics network   Communicate outsourcing needs   Develop and maintain delivery service policy   Optimize transportation schedules and costs   Define key performance measures   Define reverse logistics strategy
4.4.2  Plan and manage inbound material flow   Plan inbound material receipts   Manage inbound material flow   Monitor inbound delivery performance   Manage flow of returned products   Control quality of returned parts   Salvage or repair returned products    Perform salvage activities    Manage repair/refurbishment and return to customer/stock
4.4.3  Operate warehousing   Track inventory deployment   Receive, inspect, and store inbound deliveries   Track product availability   Pick, pack, and ship product for delivery   Track inventory accuracy   Track third-party logistics storage and shipping performance   Manage physical finished goods inventory   Manage warehouse transfers
4.4.4  Operate outbound transportation   Plan, transport, and deliver outbound product   Track carrier delivery performance   Manage transportation fleet   Process and audit carrier invoices and documents

Process and performance improvement, helps organizations adapt to rapidly changing environments, build new and better ways to work, and succeed in a competitive marketplace. With a focus on productivity, knowledge management, benchmarking, and quality improvement initiatives, organisations such as the APQC works with its member organizations to identify best practices; discover effective methods of improvement; broadly disseminate findings; and connect individuals with one another and the knowledge, training, and tools they need to succeed.
This APQC Process Classification Framework® (“PCF”) is an open standard developed by APQC, a nonprofit that promotes benchmarking and best practices worldwide. The PCF is intended to facilitate organizational improvement through process management and benchmarking, regardless of industry, size, or geography. To download the full PCF or industry-specific versions of the PCF, as well as associated measures and benchmarking, please visit www.apqc.org/pcf.

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