What Is the Difference Between a Supply Chain and Supply Network?
A supply network is developed by connecting multiple supply chains. Consider the operational activities within your organisation, these will be classed as a “supply Chain” and will deliver value to your organisation.
Once you take into consideration your suppliers and consumers supply chain and how they interconnect with your own supply chain activity, you then have an overview of the ‘Supply network’, this will enable your organisation to take a holistic view of macro and micro factors and impacts that may ripple up or down the whole supply network and impact your own organisations supply chain.
We can then define the supply network as combination of multiple supply chains that network in a commercial environment and cross link organisational structures.
What Is the Difference Between a Supply Chain and Supply Network?
The complexity and length of the supply network can be determined by several key factors
- The variations and complexity of products or services
- The number of available suppliers
- The types of raw materials required to produce the goods or service
- The geographical distance from supply source to the buyers or consumer location
- The methods and number of logistical routes
It is therefore critical for supply chain managers to understand and be able to identify as much of the supply network as possible to mitigate risk exposure within their own supply chain.
What Are the Challenges When Configuring a Supply Network?
Consumer demands can vary due to various influences, from promotional activity, seasonal demands; new entrants to the market and many more reasons besides, this can increase the challenges of managing the supply network activity. Supply chain managers will need to review waste activities, risks and innovative opportunities in order to maximise value from the supply chain.
However as the supply network evolves the following challenges can be experienced, how these activities are reviewed and developed will influence the transformation of the supply network.
- How to evaluate the influence and functionality of new technologies in the process of supply chain configuration
- How to support change management whilst increasing value in the supply network, when roles and responsibilities may change
- How to evaluate decisions in a dynamic supply network and how the decision process will influence the supply network configuration
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