supply chain

Y-Negocios

2022

We explain what a supply chain is, its phases, elements and types. Also, examples and differences with logistics.

The supply chain extends throughout the entire production process.

What is a supply chain?

In the business world, it is called a supply chain (sometimes referred to by its English name, Supply chain), to the set processes that deal directly or indirectly with supply needs, within a given organization. That is, the processes that deal with the reception and fulfillment of the requests of the customers.

Each business or organization has its own supply chain, adapted to its methods Y objectives, as well as the nature of the company. For example, companies in services have short and concrete supply chains, while the industry it usually requires the participation of numerous instances throughout a long supply chain.

Supply chain management (Supply Chain Management), for its part, is an administrative process that seeks to coordinate as best as possible the elements involved in the supply chain, thus guaranteeing its effectiveness and quality, and minimizing disorder in the production dynamics.

Phases and elements of the supply chain

Broadly speaking, supply chains comprise the set of raw Materials, component suppliers, customers, retailers, wholesalers, manufacturers and distributors, which make up the productive process everything.

Although a supply chain is usually always adapted to the nature of the company, it is possible to classify its elements according to the stage of the production process that they deal with. Thus, we can talk about three fundamental phases of the entire supply chain:

  • Supply. It is responsible for how and where to obtain raw materials, where to store them, how to mobilize them and what criteria to use in their selection.
  • Manufacturing. It is responsible for the transformation of these raw materials into manufactured objects, which usually requires energy, labor, coordination, capitals, etc.
  • Distribution. It is responsible for delivering the final product to the merchants and in charge of putting it in the hands of the target consumer public, in which more or less complex transport networks and economic agreement usually intervene.

Each of these stages is connected to the others through the flow of materials, capitals or information, and in some cases the three stages may not always be present, but some may be outsourced.

Types of supply chain

A synchronized supply chain requires perfect coordination between phases.

Depending on its constitution, we can talk about the following types of supply chain:

  • Traditional. Ideal for small companies without the need for great control over their production, it lacks a continuous flow of information between its phases, which is why they act independently.
  • Shared. Contrary to the traditional one, this supply chain has a database defined to provide information to each phase, while still allowing the decision making individual and very high margins of autonomy.
  • Synchronized. In this case, not only is the information shared by all the phases, but they all obey the same mandate and operate in a synchronized way, that is, centrally. This is only possible through logistics networks strongly based on the technology.

Supply chain example

A successful example of supply chain management is the Spanish clothing company, Zara. Its enormous coordination between phases of the supply chain allows to replenish Inventory his products up to twice a week, in a wide network of commercial establishments inside and outside of Spain.

This chain requires a communication very close between the management of each branch and the administration of the company. In addition, it has huge warehouses of highly classified merchandise through the use of computer technology.

There each product remains a very short period of weather, since its final destination is decided by crossing the sales reports of each branch and the warehouse stock. In this way, there are no delays in the supply chain that could interrupt, even momentarily, the commercial activity of the company.

Differences with logistics

These two concepts are very similar, but they are not synonyms, since one just depends on the other. Logistics is the sequence of processes aimed at the planning, elaboration and control of the products of a company. These processes are part, precisely, of the stages that make up a supply chain.

Where logistics is concerned with specifying the steps to be taken at each stage, especially in matters related to the transport of goods, the supply chain instead assumes a macro perspective, that is, a general perspective, of the necessary implements to undertake and sustain the production.

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