Building A Better Supply Chain For Your Business
A Sudden Interest In The Supply Chain
The supply chain has carved out an enviable place for itself in the news. The trade headlines have praised the success of companies, such as Walmart and Dell, largely attributing it to the way these giants manage their supply chains.
In fact, these companies have understood that better managing their supply chain allows them to better meet customer expectations in terms of availability and delivery of the product consumed.
Subsequently, the advent of e-commerce changed these expectations and the way they were met. On the one hand, the expectations of customers using e-commerce have risen; the speed with which customers can now place an order on the Internet creates the perception that the delivery of the ordered product will be just as fast. On the other hand, the poor performance of the first electronic merchants has drawn attention to the role that the supply chain plays at this level.
Let’s take a closer look at what supply chain management entails.
Components Of The Supply Chain
A company’s supply chain is defined as an organized network of partners exchanging materials and information, as part of activities ultimately leading to the delivery of products/services to the customer.
This definition highlights three fundamental components of the supply chain: business partners, material flows, and information flows. There was a lot of talk about optimizing material flows in the 80s, when the concept of just-in-time was popularized. It consisted of a company producing only what was required by the customer, and this, with the minimum of stock and waste.
“The importance of good supply chain management is well established. In fact, the only question that remains for each company is how to use it to its advantage, as a competitive weapon. »
However, sound supply chain management involves much more.
- Business partners include the supplier’s supplier and the customer’s customer. Managing these business relationships is crucial to the success of the business. Emphasis should be placed on developing lasting and profitable relationships between business partners.
- By information flow, we mean all information exchanged within the company, with its customers and suppliers, such as vouchers, invoices, etc. In order to maximize the efficiency of all business partners in a supply chain, the information supporting material flows should be accurate, up-to-date, and shared. This will allow the links in the chain to be able to react in time to problems that arise and make the best possible decisions.
One of the fundamental characteristics of the supply chain is that it behaves precisely like a… chain, that is, each of the links has an impact on the rest of the chain, positively or negatively. Thus, any breakage of goods at one of the suppliers will be passed on to the end customer; while any change in demand will cause a response from other players.
Finally, it should be noted that the above definition of the supply chain has three spheres of activity: the supply, production, and distribution of products.
The importance of good supply chain management in California is a well-established 3rd Party Logistics business. In fact, the only question that remains for each company is how to use it to its advantage, as a competitive weapon. To answer this question, look online for a nearby logistics company in California!