Upstream Supply Chain: A part of a supply chain system, process or relationship between a company and its raw materials and packaging suppliers. “Upstream” looks at supply side of the supply chain toward the origin of a raw material in the supply chain process
What are the 5 basic components of supply chain management?
Supply chain management is often described as having five key elements: planning, sourcing of raw materials, manufacturing, delivery, and returns.
The basic purpose of the supply chain is to fulfil demand, drive customer value, improve responsiveness, facilitate financial success and build a good network.
What is the Main Goal of Supply Chain Management?
The basic purpose of the supply chain is to fulfil demand, drive customer value, improve responsiveness, facilitate financial success and build a good network. Most primary goals of an efficient supply chain management should be – faster delivery, Higher efficiency and an accelerated cash flow. You cannot sell from an empty wagon and the supply chain management system will ensure that you don’t. Supply chains form the base foundation and without it, businesses can hardly survive. Contribute to your business growth by becoming a supply chain professional with a supply chain management certification.
Below are the primary goals of supply chain management
When you don’t have an effective system in place, managing the inventory, coordinating with logistics and suppliers can be a struggle. However, with a supply chain system in place, it is easier to coordinate with suppliers and buyers in the same channel. Inventory data can be shared to meet quicker replenishment of inventory according to customer demands. Goods can be delivered to the right place at the right time.
The shared goal of all the individual supply chain components is to deliver the best value to the end customer. Retailers are closer to the customers and are the ones who get customer feedback. In a supply chain, this feedback can be shared with the manufacturers to address any problems and foster a win-win situation for all. Customers recognize the value and making quality improvements is the prime goal for the supply chain.
Enable Financial Success
One of the most important goals of the supply chain is to pitch in towards the financial success of the organization. From cost efficiency to reduced inventory costs, minimal labor expenses and decreased logistical costs, the supply chain has the power to push things forward. Apart from this
it also enables to improve sales, accesses new markets and enhances differentiation. Supply chain acts as an engine to pull all major business units towards delivering value to the customers.
Now, that we have taken care of lasting supply chain relationships, customer satisfaction and financial success, the fourth major goal of the supply chain is to promote long-run stability. Collaborative planning and undertaking of all activities right from the inception to the delivery of the final products enable the business to thrive under any condition. The result is optimization and balance in meeting the needs of the customer.
Last but not least, today’s market is rapidly changing given the volatile conditions. A flexible supply chain management system will help to leverage opportunities and weigh down potential threats by anticipating changes and adapting to them.
Supply chain management aids in the end-to-end process of the business and is indeed a backbone that supports major activities.
Some of the best names in the business world attribute their success to a robust supply chain management in their organizations. Be it Unilever, H&M, Starbucks, PepsiCo, Nestle, BMW, Nokia or Walmart, their supply chain management has been a key to drive value, quality and innovation.
Lowers Operating Cost
The supply chain function in any organization has numerous operating expenses related to logistics, procurement and production. Higher the operational cost, lower the efficiency. Not to forget that cost savings flow directly to the bottom line. A tight-knitted and well-designed supply chain network ensures that all these costs stay within the budgeted plan. By reducing operating costs, the supply chain can push profits upwards without increasing sales.
Seamless Flow of Information
With so many functions working together, communication and exchange of information can become overwhelming as well as confusing. Supply chain integrates all functions and aligns them on the same page. It eliminates all bottlenecks in communication within and among the organizations, third-party vendors/distributors and customers.
Avoids Delays In Processes
Right from the procurement of raw materials to the production of goods to the delivery of finished products to customers, business is an amalgamation of processes. Any loophole or delay in one process can have a snowball effect on the subsequent processes. Such delays could reduce efficiency and productivity, and even increase the operating cost. Supply chain ensures that everyone knows what they and others are doing. It keeps the product line running smoothly.
Improves Customer Service
The customer is the king and no organization can afford their wrath. A dissatisfied customer is likely to talk more about his experiences with a company than a satisfied customer. Let’s say; you ordered a product from Amazon. The expected delivery promised to you is 4-5 days, but you receive the package after a week. Or, maybe Amazon accepted your order only to inform later the product is out of stock. Wouldn’t Amazon fall short of your expectations? However, if the supply chain management is in the right place, inventory can be managed optimally and products can be delivered to customers faster.
Supply chain is all these and a lot more. If you want to get a grip, it is recommended to join supply chain management programs. There are also services which can be helpful to build a career in this field.