A fundamental part of any business, the supply chain is the concept that refers to the interactions between a company's production, logistics, service and marketing.
Therefore, see in this guide everything about supply chain, what its benefits are, what its relationship with logistics, what are the challenges, what areas do you work in and what does an analyst in the area do.
What is supply chain?
It is the term that defines the relationship between companies and people in the logistical process that goes from extracting raw materials to delivering the product to the consumer.
Thus, suppliers, manufacturers, wholesalers, distributors, retailers and consumers form this system that involves the exchange of products and services, and the flow of information.
Therefore, the different links in the supply chain are important parts of any business and require skill and experience from the professionals involved.
Supply chain: translation
The translation of the English term supply chain is supply chain or supply network.
It is an evolution of integrated logistics, as it integrates and manages all phases of production, from manufacturing to customer service.
Supply chain: examples
Examples are: inventory management, transportation of goods and customer service.
When we order a pizza through iFood, for example, the supply chain involves everything from the farmer who plants and sells the wheat used in the pizza flour to the delivery person who takes the order.
Logistics and supply chain: understand the relationship
Supply chain covers several production activities, interconnecting processes in different sectors, such as supply, production and service, logistics being one of them.
In this way, part of the supply chain, The logistics is the activity responsible for managing orders, defining transport routes and monitoring product delivery.
How does the supply chain work within a company?
In a company, it works as a means of managing different processes, from operations management to monitoring the flow of information.
Thus, management is carried out through complete knowledge of the product or service cycle that is offered by the company to its customers.
Therefore, this involves the steps of purchasing goods, inventory control, storage, order control, delivery, returns and exchanges and customer service.
What are the main functions of the supply chain?
The professional's duties depend on the type of product or service, the size of the company and the business model.
However, supply chain management or Supply Chain Management (SCM) follows the logic of a pre-defined structure.
O Global Supply Chain Forum defines the main functions or processes as:
- Consumer relationship management;
- Customer service management;
- Demand management;
- Order fulfillment;
- Manufacturing flow management;
- Supplier relationship management;
- Product development and marketing;
- Return management.
How important is the supply chain in the supply chain?
The supply chain is responsible for managing all stages, from obtaining raw materials to delivering the final product to customers. Furthermore, it will optimize processes, reduce costs and increase operational efficiency, ensuring product availability at the right time.
Hence its importance, with well-managed management, companies can achieve greater competitiveness and customer satisfaction.
Furthermore, it will allow a complete view of the entire supply chain, from production to distribution, reducing excessive inventories.
Finally, the supply chain will exchange information in real time, allowing more accurate and faster decision-making, avoiding bottlenecks and delivery problems.
What are the benefits of good supply chain management?
Supply chain management is essential for the entire production process to be coordinated and optimized between the participating parties.
Thus, among the benefits of good supply chain management are a higher efficiency rate in demand forecasting, reduced inventory and reduced operational costs.
Furthermore, improvements in the quality of products and services, optimization of finances, quick resolution of problems and reduction of suppliers stand out as benefits.
8 mistakes that a good supply chain avoids
Some errors can compromise good management. Avoiding them is essential to avoid financial losses for the company.
According to article from the IT in the Supply Chain website, there are 8 common mistakes that can harm good supply chain management. Check out:
- Choose many suppliers;
- Not preparing for the unexpected;
- Poor cost management strategy;
- Poor cybersecurity;
- Failure to use data;
- Bad customer experiences;
- Failure to share essential information;
- Not cultivating a good relationship with suppliers.
Which areas are part of the supply chain?
The areas that are part of the supply chain are purchasing, manufacturing, inventory management, demand planning, storage, transportation and customer service.
So, find out a little more about each one:
Shopping
The acquisition of goods and services necessary to create a product or offer a service is an essential sector that is part of any company.
Purchasing involves reviewing product specifications, receiving and processing requisitions, advertising for bids, and inspecting incoming goods.
Manufacturing
It is the production of high-tech artisanal products, for use or sale, using labor, machines, chemical and biological processing.
There are several roles involved in manufacturing such as: production manager and engineer, factory manager, machine operator and quality control analyst.
Inventory management
Physical inventory management is a fundamental part of production and one of the most important assets, without which the company would not have sales.
Having the right product, in the right quantity and in the right place is only possible with correct management, which involves the supply chain.
Demand planning
It is the process of forecasting customer demand to drive the execution of that demand by the supply chain and business management.
Predicting future demand for a product or service is a task that requires analytical skills and interest in computational modeling.
Storage
The functions of warehousing include the receipt, identification, inspection, verification, storage, retrieval for issue and checking of goods and materials.
More than storing these items, storage today functions as distribution centers, where they can be repackaged and labeled before reaching their destination.
Transport
It is a fundamental sector for the supply chain because it is through it that products will reach end consumers, whether directly or indirectly.
A company may have the right product, stored in the right location, but without effective transportation, it may take time or even never be delivered to the customer.
To choose an effective and quality means of transport, companies must take into account the most appropriate cost, speed, reliability and service capacity.
Customer service
Ensure customer satisfaction, answering questions, fulfilling orders and resolving any problems are essential activities that deserve the company’s full attention.
Although it is a sector that appears to be at the end of the supply chain, it is not the end of the process, and can often be the beginning of the relationship between consumer and company.
Supply chain challenges
Supply chain challenges have grown in the last two years with the Covid-19 pandemic, which has meant that many companies have had to adapt to this context.
According to the report SC: challenges and trends beyond the pandemic, of consultancy Globant, companies must have more agility, quality and speed in their services.
The challenges are accurately forecasting deliveries, refrigerated deliveries, reducing logistics costs and ensuring a return on investment in technology
How to apply the supply chain?
To apply to the company, you must take into account the most suitable type, whether you have qualified staff and which areas you should pay more attention to.
Blog article of the technology company NeoWay gives some tips on how to apply it to a business. See the tips below:
- Have an aligned team acting in an integrated manner;
- Processes must be structured to be efficient and speed up production;
- Analyze suppliers and pay attention to deadlines and cost-benefit;
- Study and analyze distributor options;
- Have a customer service channel;
- Use technology to benefit the business.
Supply chain analyst: what do you do?
A supply chain analyst is the professional responsible for monitoring all stages and sectors involved in the company in order to correct errors and reduce costs.
The analyst's duties include efficient inventory control, cost reduction, ensuring fast and safe deliveries and being able to meet customer demand.
Supply chain consultancy: when to hire one?
The time to hire a supply chain consultancy is when the company is looking for a solution to a specific problem and knows what objectives it wants to achieve.
Finally, the consultancy Expert indicates some reasons why you should hire a consultancy:
- Search for a specialized solution;
- Reference of best practices;
- Impartial external view;
- Support for making decisions;
- Project vision with beginning, middle and end to solve the problem.
Which course to take to work with Supply Chain?
One of the most suitable courses for this purpose is a degree in Administration with an emphasis on Logistics and Supply Chain.
In this course, you will have the opportunity to acquire knowledge of operations management, international logistics, supply chain and optimization strategies.
Additionally, it is worth considering postgraduate programs and specific certifications, such as Six Sigma and APICS.
Tips for optimizing Supply Chain management
Check out some tips to improve your company’s supply chain management:
- Improve visibility of your supply chain by monitoring and tracking every step of the process.
- Utilize advanced technologies, such as real-time tracking solutions and data analytics, to identify bottlenecks and make decisions based on accurate information.
- Establish strategic partnerships with reliable and committed suppliers.
- Look for long-term collaborations based on transparency and mutual information sharing to strengthen your supply chain and reduce risks.
- Automate repetitive and manual tasks using integrated Supply Chain management systems. The implementation of efficient technological solutions will speed up processes, reduce errors and optimize communication between everyone involved in the supply chain.
