The old view of the supply chain considers the individual companies and elements within a firm as separate units that represent “functional” entities. Now, the integrated supply chain concept is different from the previous ones. The new layout of relationship unlocked the full power of supply chain management and became a tool for creation of value in a company.
“A supply chain consist of all stages involved, directly or indirectly, in fulfilling a customer request. The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers, and customer themselves” – from Chopra and Meindl.
Each supply chain has its own unique set of market demands and operating challenges and yet the issues remain essentially the same in every case. Therefore, companies must take decisions in regards to four areas:
What are you going to produce? When? How? Do you have the market for it? Production includes the creation of master production schedules that take into account plant capacities, productivity, efficency, workload balancing, quality control among other factors.
How much inventory should be held as raw material, semifinished or finished goods? Do you need safety inventory? Primary porpuse of inventory is to act as a buffer against the uncertainty in the supply chain. The company needs to know what the optimal inventory is and reorder points.
Which region are you looking to serve? Is the location you’ve chosen properly suited to handle your unique needs?
There are many factors to take into consideration when opening a new warehouse facility. From location and build to storage requirements and labor force availability, making the right choices in regards to both warehousing and distribution methods could make all the difference for your company.
This refers to the movement of everything from raw material to finished goods.
What are the best transportation channels for your type of product? The tradeoff between responsiveness and eficiency is evidenced in this choice.
For example, air transportation is much more faster but also more costly.