I have heard a lot about Supply Chain? What is it? Who are the participants?
Elements of the Supply Chain
A supply chain can be termed as a system of steps taken for a product to reach from source to the end customer. Supply chain is basically a network comprising of organizations, Logistics, materials and information involved in moving a product or service from supplier to end customer. The complexity of supply chain differs from product to services.
A small and important part of the Supply chain is Business Logistics Management which is the movement of material and production within the company, while Supply chain refers to all the processes that comes into picture right from sourcing to the end product. The supply chain starts and ends with the customer.
To give you a general idea about the participants involved in the SCM.
The most important stakeholder of the Supply Chain is the end consumer. He is the one who motivates the other stakeholders to get involved in the Supply chain. The Supply chain starts and ends with the customer. When a consumer decided to buy, he starts a Supply Chain with the flow of information from one side and the financial at the closing stages.
At a point, when the customer makes a buying decision. The wheels of the supply chain start moving. The customer reaches the organization offering the product for sale; he contacts the sales manager, who exchanges information in the form of money and time.
If the product is available the sale is made from the Inventory. Else, the remaining quantum of order is fulfilled through the manufacturing facility. Supply chain encompasses all the organization / participants it touched. The vendors supply the raw material, the manufacturers produces it, warehouses store it, Distribution centers who deliver it to other business, Retailer bring the product to the end user. So the supply chain starts with the demand being generated by the end user and ends with the fulfillment of the end consumer.
The Supply chain is so critical because even if there is demand and production, nothing can be fulfilled without the value chain. A manufacturer/ service provider can’t provide service at the desired time, place, and price without a supply chain. Even if he manufactures exquisite quality but the competitive part of the business is the supply chain. Deficiency in manufacturer’s part can’t make up by improving the Supply chain. This is the area where there is a whole multitude of space for increasing efficiencies and profits. A good supply chain ensures competitiveness for the manufacturer and this is the space where manufacturers compete with each other through their Supply Chain.