![]() The following sections will cover some of the things that are done in relation to each one of these elements. These include supply management, managing the internal operations, distribution management, and managing the integration of all of these so that all parts of the supply chain are working with each other in harmony. Figure 4.1: Upstream and downstream of a supply chain and its flows.įoundational Elements of Supply Chain ManagementĮach organization in a supply chain needs to manage four key elements. ![]() For example, the retailer needs to pay the distributor for the goods they have received from them.įlow of information happens both ways in the supply chain since organizations will need to share different type of information with each other so that the whole supply chain can make better decisions to improve overall performance. In addition, if there is any returns for any reason, there will be a reverse flow of materials/goods in the opposite direction to the forward flow.įlow of money (cash flow) happens from downstream to upstream. There is a forward flow of materials/goods for the regular flow that happens all the way from higher tier suppliers (upstream) to the end-consumer (downstream). There are three types of main flows that happen in any supply chains: flow of materials/goods, flow of money/cash, and flow of information. This way, everybody in the supply chain sold less than what they could if the retailer had ordered the right quantity at the right time. Let’s think about it for a second: fewer products had got ordered from the manufacturer, and thus, fewer raw materials were ordered (by the manufacturer) from higher tiered suppliers. One weak member in any supply chain will impact everybody else.įor example, if a retail store is not doing a good job at replenishing their inventory on time, the product will not be available to some end-consumers when needed, and as a result, lost sales happen and that supply chain will be affected financially. They need to regularly check with their supply chain members to make sure that everybody is performing at their best. As they say, “a chain is only as strong as its weakest link.” This has implications for the supply chain management in a sense that it is not enough for the companies just to focus on their own internal operations. The organizations that participate in a supply chain include suppliers, manufacturers, transporters (also known as carriers), distribution centres, wholesalers, retailers and end-consumers.Įvery link in this chain of supply is very important. Each organization has a role to play in adding value for the final customer. ![]() Supply Chain refers to the group of organizations that are linked together by their participation in order to fulfill a customer order from the sourcing of raw materials through the production of goods to distribution and sale. Identify types of inventory in the supply chain and reasons for carrying inventory.ĭefine the term logistics and give advantages and disadvantages to various forms of transportation.ĭescribe the various forms of communication and technology in the supply chain.Ĭalculate inventory turnover and days of supply as measures of supply chain performance. Explain the term supply chain, describe its flows, and the organizations that participate in a typical supply chain. ![]()
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