What is a Supply Chain?
In its simplest form a supply chain is the activities required by the organisation to deliver goods or services to the consumer.
A supply chain is a focus on the core activities within our organisation required to convert raw materials or component parts through to finished products or services. We look upstream to our suppliers and their supply of raw materials or components into our own organisations supply chain.
In a traditional manufacturing environment the activity of interfacing with suppliers is generally supported by “Procurement”, the materials will then pass through goods in warehouses (if products) through the manufacturing site and onto the finished goods warehouse, this activity is the core activity of “Operations Management”, throughout the supply chain logistics will play an integral role in the movement of inbound materials and outbound goods in order to ensure the finished product flows downstream to our consumer.
A supply chain can take on the form of a product based supply chain or that of a service, where services come together to offer an overall customer service as opposed to a finished product, an example of this would be the shipping of customers goods, staff, supply of vessel and fuel are all required in order to provide the shipping service to the consumer.
When our supply chain is connected with that of our suppliers and consumers, we start to build a supply chain network, where we can then go onto understand the flow of both materials and information in a much more complex way.
What Are the Stages Within a Supply Chain?
In its simplest form the stages in a supply chain are as depicted within the Porters Value Chain and this can be considered a good guide to a supply chain structure
- Marketing and Sales
What Is Supply Chain Management?
Supply chain management takes a broader view of influences that will impact our supply chain, and when we discuss supply chain management we must start to understand the strategic decisions that influence the supply chain activity.
There are many tools that can support the building of the supply chain strategy, value as perceived by our consumer must have full consideration when building any strategy. Value is usually delivered through differentiation of our product or service offering through innovation or cost. Cost or differentation will form part of the main corporate strategic objective.
Once the strategy has been set for the organisation, any decisions then made within the supply chain must ensure that they deliver against the corporate strategy, this is supply chain management in operation.
Within supply chain management as a topic we will go further into strategy, identifying the importance that organisational strategy plays on our operational supply chain activities, along with the role that other functions within the organisations play in supporting the decisions made within the supply chain to ensure alignment to the corporate and operational strategy.
How we remove waste activities in the supply chain in order to drive value will be influenced by micro and macros factors, STEEPLED factors can influence our supply chain decisions.
What Is the Main Goal of Supply Chain Management?
The goal of supply chain management is to look holistically at the entire supply chain from supplier through to the consumer, and review three core areas of people, process and systems in order to maximise value from all activities.
What Is Supply Chain Management and Why Is It Important?
A concern, at the most fundamental level, is that unless we can describe what we do and demonstrate our success to our stakeholders we cannot win their recognition and support.
By defining ‘Supply Chain’ as the functions and activities that go into producing goods or services from supply of components/raw materials through to finished goods being provided to the consumer, then this starts to build a picture.
To find out more about this subject read the full knowledge papers:
What is a Supply Chain:
What is a Supply Chain: login to view
Login to view our members-only guide to Defining Supply Chain and Supply Chain Management. If you would like to gain access to over 1000 members-only guides, webinars and papers join CIPS now. Login or Join CIPS
DOWNLOAD THE FULL GUIDE
For addition reading on this topic visit Supply Chain Management