Supply Chain is global network used to deliver product and services from raw materials to end customers through an engineered flow of information physical distribution and cash. One of the goal supply chain is meet customer needs. It’s begun from supply of raw material until delivery goods to customer. While management of the flow of goods and services and includes all processes that transform raw materials into final product it’s supply chain management
There are 3 basic components of supply chain, start from the Seller is a supplier who provide goods in the form of raw materials and services or a person or organization with whom the buyer does business. A Producer is the one who receives components from the seller to produce a finished good or service. And then the customer is the one who receives the finished product. Supply chain has 3 types of strategies which are stable, reactive, and Efficient Reactive. Stable supply chain strategy is appropriate for chains that are focused on execution efficiencies and cost performance. Reactive supply chain strategy works well when the chain acts to fulfill demand from trade partners, and the last strategy is Efficient Reactive supply chain strategy which focus on the efficiency and cost management on the total delivered cost of finished goods.
The purpose of supply chain in a company or business process are:
1. Make sure products can be deliver on time
2. Reduce production cost, so the company can get more profit.
3. Maximize on the supply chain results.
In some company, there are supply chain management. One of the tasks is they need to give the customer the product they want, when they want it, as often as they want it for a reasonable price. The profit has been got from manage of supply chain can make the company become bigger. SCM Oversees each touch point of a company’s product or service, from initial creation to the final sale. With so many places along the supply chain that can add value through efficacy or lose value through increased expenses, increased revenue, decreasing cost on the company’s bottom line.
The example of Coca Cola Supply chain, which started from Syrup suppliers where they make the flavor and then to 1st tier supplier coke concentrate plants (Where they make the syrup). Water suppliers (Carbon dioxide Suppliers), and from Glass factory (Aluminum Factory) to packaging facility. Next after supplier the product through Manufacturing, Warehouse, and Distribution. The product distributed to supermarkets, convenience store, Vending machines, etc, and then to the Consumers.
SCM is really important in a company or business process. A lot of branded company still use it until now. Absolutely there are some challenges in supply chain, it’s involves many parties with different interests. To deal with it, SCM need to create supply chain teams, measurement of supply chain performance, as well as building coordination and collaboration among business partners so that the process allow companies to achieve low inventory cost.