If you are curious about supply chain management and how it can help your company, this article will help answer your questions and get you thinking about the solutions your business needs.
A quick definition of supply chain management
Since at least the days of assembly lines, successful businesses have ensured that very specific items are sent to other companies, at very specific times, so that every business always has the materials they need to complete their business. For instance, if your business specializes in canned tomatoes, you’re involved in a supply chain.
- The farmers who supply your tomatoes need fertilizer and seeds so that they can produce tomatoes for you.
- You require those tomatoes and you also require metal to create your product (plus a lot more).
- The restaurants that buy your canned tomatoes turn those tomatoes into marinara sauce.
The farmers need to get their seeds, you need to get your tomatoes, and the restaurants you sell to need to get your canned tomatoes in order to make marinara. Ensuring that all that happens smoothly is what we refer to as “supply chain management.”
What has changed in supply chain management?
Businesses used to be able to count on a few suppliers from which they could get their materials, but the days of one company or a couple of companies producing parts (or canned tomatoes) for everyone else have passed. If one or two companies supplied every other company with a needed product, they would be put under tremendous pressure to keep up with lower costs of labor from around the world, while also meeting the enormous demand that today’s world requires of suppliers.
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