Supply chain, undoubtedly, is one of the most important parts of the industry.
The supply chain in the current climate we find ourselves in, forms the backbone of any industry to ensure that the key objective is achieved in the final product reaching the right ‘end customer’ at the right place, in the correct quantity and on time.
Links in the chain
The supply chain begins with a robust supply base and suppliers delivering raw materials to the manufacturing units and includes every activity that follows to ensure that the finished product is delivered to the end consumer. All the various activities involved in this cyclic process are the links that form any supply chain.
Many activities, functions and people work in synchronisation to ensure that the flow of goods and/or services to the final user are seamless and are carried out as efficiently as possible.
Some of the major activities within a supply chain are production, inventory management, warehousing, logistics and distribution.
Having an optimized supply chain is good for industries!
The overall cost of production and operations can be reduced with a fully optimized supply chain. Different industries will have customised supply chains that fit with their demand and supply plans. For example, the supply chain for perishable goods like food or dairy products will be different from a supply chain for products like heavy machinery with a longer shelf life. This is because these industries have very different processes and face different challenges but will both have a supply chain in place and they use it to save time and reduce waste or overstock of product lines.
Workflow and sharing of critical information
We can also say that a supply chain is a network of people, engaged in different activities from procurement, production, warehousing, transportation, distribution, finance and sales. The flow of information – ‘One version of the truth’ within this network becomes necessary to enable businesses to form the most accurate plan possible, identify risks and to stay prepared for any unforeseen challenges along with making decisions based upon the most accurate and factual information known across the business at the time.
Every single process that happens in between the procurement of raw material and the final product reaching a consumer, can involve many sub-processes. Managing all these processes and actions isn’t an easy task for any business and that’s why Supply Chain Management (SCM) is crucial.