A supply chain can be defined as a system of organizations, people, technology, activities, information, and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials, and components into a finished product that is delivered to the end customer. The supply chain goal is to reduce the total cost, whereas providing the desired level of responsiveness to customers
The supply chain segment involved with getting the finished product from the manufacturer to the consumer is known as the distribution channel.
For most companies, the supply chain is an essential component of success. The supply chain is a key determinant of a company’s responsiveness to emerging opportunities. The supply chain is an important link with the company’s customers.
A simple supply chain links a company that manufactures or assembles a product with its suppliers and distributors and customers. It should be noted that every supply chain starts and ends with the customer. A typical supply chain is made up of a number of elements that are connected by the movement of goods
along with it.
The supply chain begins with the customers and their need for a particular product. The customer contacts the Sales Department of the company, which enters the sales order for a specific quantity to be delivered on a specific date. The sales order includes specific requirements that have to be fulfilled by the production facility.
The requirements activated by the customer’s sales order are combined with other orders. The Planning Department creates a production plan to make the products to complete the customer’s orders. To manufacture the products the company has to purchase some raw materials.
The Purchasing Department receives a list of raw materials and services required by the Production Department to fulfill the customer’s orders. The Purchasing Department sends purchase orders to selected suppliers asking for the necessary raw materials to be delivered to the manufacturing site.
Inventory. The raw materials are received from the suppliers; then they are checked for quality and accuracy and moved into the warehouse. The supplier will then send an invoice to the company for the delivered items.
The finished products ordered by the customer are manufactured using the raw materials purchased from suppliers. The items are tested and then they are stored in the warehouse prior to delivery to the customer.
The Shipping Department determines the most efficient method to ship the products to the customer so that they are delivered on time. When the goods are received by the customer, the company will send an invoice for the delivered products.
(by Yulia Stukalina)
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