The supply chain is a vital part of any business and is essentially the core backbone for any business which provides a product to their customers. It involves the life cycle of the product from its conception and development to storage and finally the distribution to the end-user. There are several stages of the supply chain, and it is vital that each stage is perfected in order to ensure a well-oiled and smooth operating machine that works efficiently and effectively. Each stage will involve its own set of processes and resources required including different employees, machinery and similar aspects. It is important for any business owner to fully understand these processes and know-how to make them as efficient and effective as possible for an operation to operate smoothly.
In this article, we will explain the different stages of the supply chain and why they are important to the overall operation of the business.
Procurement and development
Procurement and development is an important stage of the supply chain. It involves understanding what the product is that you will be selling, and knowing the materials required to develop it. These materials must be sourced from a quality provider in the supply chain, and the amount of materials is dependent on the demand for the product. It is important to get this stage right in the supply chain, as the more demand there is, the more materials are required to make more. Failure to do so can result in losing out on potential profits and unsatisfied consumers, which can affect your business adversely in the long term. The same applies when there is decreased demand for a product, and you must be able to decrease production to make sure you don’t overspend and cost the business more money than required.
While this may seem like an easy stage of the supply chain, storage is actually more complex than you think. It involves being able to know how much space to rent out for storage for your products, based on the number of products you have. Renting out too much storage means you will be overpaying for what you actually need, and as a result, this will cost you in the long term. Knowing how much to exactly rent out is the way to go for success in this stage of the supply chain, as you will only be paying for exactly what you need. Warehousing is the best way to go for this, and it is best to use a third-party source.
Distribution in the supply chain involves how you will get your products out to the end consumer. Distribution could involve trucks, shipping, and freight to get your products ordered by the consumer to their location. This is obviously a vital part of any supply chain, as it is the final stage to getting the end consumer their products. This is important, as organization will determine whether or not the products will get to the end consumer on time. You will need to take into account which routes you will take to deliver products as well as how quickly you are promising to deliver the products to the customer.
Overall, the supply chain is made up of several different stages, which are each equally important to the core components of a business operation. For these reasons, the supply chain must be considered heavily and possibly outsourced to a third party to ensure the entire business operates smoothly, efficiently, and effectively and for overall success in general.