What is Supply Chain Management?
Supply chain management is a broad and strategic process of managing, organizing and connecting the many stages in the production and distribution of goods or services involved in meeting customer demand. Supply chain management is the process of planning, implementing, and controlling the entire system of production and distribution. The supplier’s job in this process is to deliver what the company needs on time and at a cost that meets requirements..
Supply chains are connected to business around the world. They are made up of multiple companies, regions, and locations. The goal of each company in the supply chain is to provide products and services that meet customer requirements at a competitive cost. This means that each company must work together to ensure that products are placed where they should be, on time, and at a price that meets or beats competitors’, customers’, or regions’ expectations. The supply chain manager must work with each link in the chain to ensure that products are delivered on time and at a cost that meets or beat competition.
Historical Supply Chain Management Process
The easiest way to visualize the flow of information within a supply chain is through a vertical flow chart. This type of visualization can help an organization understand where production activities take place, the movement of raw materials through the supply chain, and what other companies are doing with these materials. There are many different types of supply chains, but vertical flow diagrams usually depict three basic relationships between suppliers, distributors, and customers.
Suppliers produce the raw materials which are used by the next company in the supply chain. This is represented in a vertical flow diagram as the production process. Distributors sell to retailers, who sell to final customers or consumers, who buy products for resale. Therefore, distributors are ultimately connected to the people who use the products they sell, and this relationship is represented in a vertical flow diagram as sales. Customers need products that meet their requirements. These products are delivered to them by another company. This is represented in a vertical flow diagram as customer service.
To better understand the process of how information flows between and within supply chains and departments, we can compare it to a relay race. A relay race requires that runners pass the baton to the next runner so that they can continue running their leg of the race. In supply chain management, each company completes one part of the process, and passes materials along to another company so that they can complete their part of the process. For example, a coffee roaster produces roasted beans which are then shipped to a distributor’s warehouse where they are stored until needed by retailers who sell coffee to consumers. As soon as coffee is sold by retailers, it is purchased for resale by consumers.
Because each company, product, or service is consumed by another company in the supply chain, the entire chain must be managed. Not only do supply chain managers care about how materials are produced and distributed within their supply chain, but they must also make sure that the finished product is available to the final customer. The final customer may be a retailer or a consumer at a grocery store where coffee is sold for resale. Customers now expect that specific products and services will be available at a competitive cost. Some customers will only accept the highest quality products and services (i.e. “organic” and “sustainably sourced”). This is especially true when the final product comes in contact with food or medicinal products.
Like logistics in general, supply chain management consists of many intricate parts which only come together when all components are properly understood and well-planned for. Business managers are often overwhelmed by the intricacies of piecing the different parts of a supply chain together, leading to an urgent need for Supply Chain Specialists. Fintalent provides a market place that can meet the Supply Chain Consultant needs of businesses. Fintalent’s best in class freelance Strategy Consultants will analyze your business and help yo setup a proper and effective sSupply Chain Management system that will provide a connection between demand and supply – making sure the right people get the right things at the right times in order to keep everyone happy.
