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Purpose of the supply chain and its operation

If you want to improve the performance of your company you need to know about supply chainWell, if you carry out good management, you will improve in an increasingly competitive market.

However, for this you must be able to understand what it is about, its concepts, logistics and of course you can also read an example below because it is the most practical for you to transport it to your business idea.

What is the supply chain for?

  1. The supply chain and its good management is essential for any company, since it allows establishing the best competition, especially in a current market of maximum competitiveness.
  2. It allows the company to compete in such a way that it always achieves success because it implements practices in several important areas such as the transport of the merchandise, the production of the product, it pays attention to the demand, it plans it by joining forces in all these areas, which It allows the product to reach the customer’s hands depending on the fact that it always manages to satisfy it.
  3. In fact, it covers several processes of the company from the people who work in all areas, through the applied technology, the physical space of the productive and administrative area, the raw materials used in the production of the product or the transformation of the same to reach to the final product.
  4. It also includes all the services involved in the production and distribution of the product, thereby ensuring the best relationship between the company and the client.

What is a supply chain

  1. A supply chain It is the set of processes that gives rise to the company having an efficient type of organization to develop its service or product based on its production satisfying the end customer.
  2. Every company, whether medium or large, has common characteristics, particular sectors that are dedicated to a type of process, whether administrative or within production, that makes that product that it produces can reach consumers with the best quality.
  3. The supply chain involves the set of activities or processes that are carried out in order for the product to be placed for sale and reach the customer.

Those involved in the supply chain

Within the supply chain there are many sectors of a company and organizations that intervene, for example:

  1. Suppliers, although not an intrinsic part of the company, are involved because they are the ones who offer the raw materials or goods so that the product can be produced.
  2. Carriers are the organizations that are responsible for moving raw materials and final products.
  3. Manufacturers are the ones who transform the raw material into the final product.
  4. Communication, which is always important so that the chain can flow normally and with excellence, because without communication it will be impossible for a product to develop properly.
  5. Technology is a main element because it is what allows all tasks and even the final product to be optimized and produced in the shortest possible time without this production speed affecting its quality. On the contrary, it should highlight and favor it.
  6. Although the client is the last link in the chain, it is the most important because the product or service is developed or produced on the basis of him, since his expectations must always be met.

Logistics and supply chain

1.Although logistics and supply chain are related to the different types of business and its management, they cannot be understood separately because one belongs to the other, logistics to the supply chain.

  1. In fact, the logistics management is in charge of delivering the product, of the cost and of controlling that the product arrives correctly at the place and on time.
  2. Well, everything related to transport is part of the logistics from managing the vehicle fleet, storing the products, handling the packages, preparing the different orders, managing the operators and being in charge of being alert to the supply and demand of the company’s products. .
  3. The supply chain includes logistics, integrates the planning of the purchase of raw materials, supplies the company, produces, coordinates and collaborates with all the areas that participate in this fundamental channel so that everything works correctly between suppliers, intermediaries that could need the company including supply and demand.
  4. It is important in a business model that seeks the best performance from functions and processes that are unified to accelerate and improve the production and delivery of the final product.
  5. While logistics is in charge of controlling the products and their materials so that they arrive at their destination with the best possible quality and cost from the point of origin to the consumer, the chain plans all the activities that integrate the production of the product from the collection of raw materials, their transformation, distribution, marketing, placing vein points, designing the product, controlling finances and applying the precise technology.
  6. All areas of the chain are synchronized in such a way as to prevent failure from occurring.

Example supply chain

  1. As an example of a supply chain, you can think of Walmart, since as a supermarket it was at the head of the chain with a system that it called cross docking.

He innovated with a system in which the products are transferred to the truck without having to go through the warehouse, which gave him savings in terms of storage.

Even this measure allowed Walmart to offer its customers a very competitive price.

  1. Zara is another practical example, as the company maintains perfect coordination in all its areas, which allows it to replenish its products twice a week.

At the end of the day, each store representative or their manager submits the amount of sales for each of the store’s products. In this way, and with perfect technological coordination, the results are crossed, which leads to packaging and preparation of the garments in the trucks in such a way that it appears to be automatic due to the efficiency and speed that it demonstrates.