Supply Chain is basically the network of buyers and suppliers that maintain a market for a specific product. Its support the distribution of goods to produce and take the product to customers.
It includes the whole operation, such as people involved in the processes, companies, the information exchanged between partners and associates and the resources that must be transported.
Also, supply chain is the representation of the path of a product or service from the manufacturers to the final customer, that being retailers or individuals. Let’s discuss more about supply chain in this article.
The role of Supply Chain management
Maintaining a healthy and optimized supply chain is essential to remain costs and keep competitive in a business environment. It’s a fundamental aspect of every market that deals with products.
On a network are included producers, vendors, warehouses, transportation, distribution centers and retailers. That makes it very complex to administrate, so the management position is key to guarantee everything is running.
Those entities must perform product development, marketing operations, distribution, finance, and customer service. So, each department takes part at one side of the supply chain, involving the whole company.
A well-managed supply chain can lead to lower costs and faster production cycles and therefore, a higher profitability and trust on the side of customers, who can receive their items on expected timing.
The steps of Supply Chain management
As we said, keeping a supply chain running is extremely complex, so you need to establish teams that can handle the whole operation. The basic steps necessary to maintain are:
- Plan inventory and manufacturing processes, ensuring supply and demand with an adequate balance, without excessive items or stockouts.
- After you plan the manufacturing process, its necessary to produce the products, on other words, create the final product.
- Also, its important to test the product developed, because you don’t want to deliver something wrong to customers.
- With the final good tested and approved, it goes to transportation, to avoid keeping stock for longer than necessary.
- The transport will deliver the product to the distributor, retailer, and consumer.
- Finally, you need to review the process and consider the consumer side to improve and fix problems.
Types of Supply Chain
Not every company or production can be contemplated by the same functionalities on supply chains. Because of that, there are a few options of supply chain considering particularities: continuous flow, fast chain, and flexible models.
The continuous flow model is the most common one. It works for companies that produce one product without much variation. Usually, as the product has high demand, there is no necessity to adapt a lot.
As it doesn’t change a lot, managers can have a better control of process and keep a better timing. In this model is common to continuously seek raw materials.
The fast chain model works for limited items, which doesn’t have continuous flow throughout the year. As products on the fast chain trend and finish faster, you need to develop faster.
Finally, the flexible model contemplates seasonal and holiday demands. Because it receives a huge demand on a specific time with the following of no demand. So, the flexible model ensures a raise in production and time when its needed.
Supply Chain management and logistics management are usually used as the same thing. But they are different as logistics refers to planning, and supply chain is the action and material support of operations.
To maintain a successfully operation, you need to ensure that your business is delivering in good condition at the time predicted. Doing that will ensure productivity and profit.