Have you ever considered how that must-have thing or required necessity you just purchased came to fruition? If you are a business owner with a product line, you most certainly have spent quite a bit of time on the art of supply chain management. Whether you’re a novice or a well-entrenched titan of business, there are a multitude of variables involved in this process.
The coordination of the supply chain can be so complex for the average business leader as the general process is a business in and of itself. Enter the expert supply chain consultants. They are the professionals who handle all of the varied logistical steps involved from the beginning to the end of the product cycle. Below are a few of the major touchpoints involved in the process.
Procurement is an involved process of finding or procuring the initial raw materials to produce your final product. This operation includes the agreements between your company and the entity providing the material. Additionally, it involves the process that moves to the next step of combining that material with others into the final output. Consider all of the sourcing that may go into the production of a laptop.
Here is a simple infographic for the supply chain of a laptop from inception to end-user:
By Andreas Wieland, CC BY-SA 3.0, Link
Supply and Demand Planning
When you know what you have (supply) and are able to properly assess and plan or forecast (demand planning) for the products you have a solid part of your business plan accomplished. Knowing how many goods will need to be produced during specific times of the year – perhaps an increase in the volume of toys around the holidays – is vital to keeping your business in good standing with the general public as well as generating revenue.
When the consumer is ready to make a purchase, they expect the item to be available to them and so do you. All of this takes dedicated tracking and analyzing to coordinate.
Inventory control and management involves knowing what type of products are available and where they are located. Is it reasonable to have an excess of finished product only to pay to store it in a warehouse should you not have dedicated space? This eats into your bottom line.
However, this scenario might be necessary for the short term if you are aware of prospective future disruptions in the raw materials to produce your goods and/or if purchases are expected to ramp up in the near future, thus requiring a larger number of items to be available and lessening the storage time.
At the end of the day, looking at the supply chain for your product actually encompasses so much more than getting your product from the drawing board to the consumer. For those with an environmental heart, knowing how much plastic is used to wrap the products on the shipping pallet in preparation for transport is important.
You might wonder whether the packing materials are recycled, recyclable, or even biodegradable. Reducing your personal carbon footprint is crucial, and so is the planned reduction of business supply chain emissions and non-environmental policies.
Management of the supply chain includes much more than the product itself. Engage with the professionals to get the best value and service for the benefit of all.