A supply or supply chain includes all those elements that allow the company to have a necessary organization to carry out the elaboration or development of a product or service.
It also works so that said element fulfills its main objective, which is to satisfy the needs of the client that it will finally reach.
Purpose
- The creation of a supply chain is directed, by a company or a factory, to meet and satisfy the needs of its customers in the best possible way.
- The main objective of a supply chain will be, then, to provide materials, in quantity, quality and time at the lowest possible cost.
- To achieve these objectives, the following formula must be used:
- Avoid unnecessary losses through compliance with times and proper inventory management.
- Improve and reduce times: having adequate coordination and good communication channels such as infrastructures and means of transport that imply respecting them.
- And, finally, knowing how to respond efficiently to changes in demand and supply.
- The main objective is to create a dynamic or flow of distribution and information throughout the process of obtaining the raw material, until its subsequent manufacture and distribution to the consumer.
- In this process it is important to have communication with suppliers, distributors and customers under control so that this formula is 100% effective.
Basic elements of the supply chain
- Supply: refers to activities necessary to obtain and deliver raw materials necessary for production.
- Manufacturing: process by which raw materials are transformed to obtain the final product or service.
- Distribution: process that is responsible for getting the products or services to the final consumer through the transport network and retail establishments.
Supply chain members
In order for the process to be carried out and achieve all the necessary objectives, in an effective way, it is necessary to have different ” gears ” that make the supply chain work:
- Suppliers: people or organizations that are in charge of offering, distributing or leasing goods and services.
- Transportation: responsible for moving the material or raw materials or products between the company that manufactures the product and those that supply them.
- At the same time, once the product is finished, they are in charge of distributing it to the points of sale.
- Manufacturers: they are in charge of transforming the raw material into the final product that will reach the customers.
- Customers: it is one of the most important parts of a supply chain, since they are the ones we try to meet their needs through our products.
- Communication: basic characteristic so that all the operations that are carried out in each element of the chain are fluid and develop without any type of interruption or delay.
- Technology: is what allows the elements of the supply chain to optimize their tasks and do them in the shortest possible time and with greater efficiency.
Main activities
Despite the fact that the supply chain is almost always the same. The activities carried out in it depend on the product we are making.
On some occasions certain activities will be required during production, purchase or distribution. In other cases we will need to make certain modifications in these activities for better management.
That’s all, regardless of how specific our supply chain may be, there are some activities that are common and necessary to optimize the final result:
- Planning: planning correctly when carrying out our product will make us more efficient and avoid unnecessary losses.
- Stock management: keeping good control of storage and correct management of surplus or “stock” is very important.
- Purchase order processing: new technologies even allow us to automate these processes. But you always have to take into account how necessary the purchases are so as not to buy too much product and avoid losses.
- Transfers and dispatch: finding the best way to distribute our final product or to deliver the raw materials helps us to keep the supply chain flowing and deadlines are met.
- Monitoring and control of unforeseen events: as in any process, unforeseen events can always arise that delay delivery times. Keeping an adequate follow-up of the supply chain helps us to see where the unforeseen event has arisen.
- Customer service: activity that is offered in order for the customer to obtain our product at the right time and place. At the same time we make sure that it is used correctly.
- Administration of guarantees: it is the control and traceability of the guarantees during the process so that the product reaches a successful port.
- Payment processing: we will have to look for the best payment processing and speed it up as much as possible to avoid losses.