/tr/lp/blog/key-terms/supply-chain-business-guide
Moving Goods & Managing the Process: What is a Supply Chain?
06/06/2024
Have you ever considered how many steps it takes for a product to reach your hands? From inception to completion, there are numerous stages and steps involved to produce the final product, all of which fall under the term ‘supply chain’.
A typical supply chain might start with agricultural produce being harvested at a farm. It is then transported to a storage warehouse in the country of origin, prior to being dispatched to a food processing facility overseas, which makes it into a consumable product that is transported to a retailer. Every stage in this process, including the means of transport, is a link in the supply chain.
Farmers, manufacturers, freight companies, distributors and retailers are all links in a supply chain. A supply chain could be regional, national or international in scale. Effective supply chain management is vital to businesses, because in competitive markets it can make the difference between gaining an economy of scale or achieving greater profitability over a rival.
Unveiling the Three Key Supply Chain Types
Supply chains management is commonly associated with mass production and taylorism in the early 20th century. There are three main types of supply chain model: continuous flow, fast chain and flexible, all of which are suitable for different businesses and industries and designed to manage the flow of materials and goods from start to end.
Unveiling the Three Key Supply Chain Types
Supply chains management is commonly associated with mass production and taylorism in the early 20th century. There are three main types of supply chain model: continuous flow, fast chain and flexible, all of which are suitable for different businesses and industries and designed to manage the flow of materials and goods from start to end.
Continuous flow
The continuous flow model of supply chain is for products where there is little or no variation in the volume of production or demand. Manufacturers know how much raw material they need for production, and distributors are fairly sure how many products they are going to be dispatching to the next stage in the chain. These kind of supply chains are generally lean, with just enough flowing through the production process at any one time. While continuous flow supply chains can be vulnerable to shocks, such as geopolitical changes, natural disasters or pandemics, they can be extremely cost efficient and can help encourage better communication and collaboration amongst the different stakeholders.
Fast chain
The fast chain model is ideal for companies that need to get their products in the hands of consumers quickly. Prioritising speed and responsiveness, fast chains seek to deliver maximum returns in the minimum delivery time. The latest trends and consumer demands don’t wait for long, so these businesses rapidly move from prototype to production to shopfloor. There may be shorter distances involved in this type of supply chain.
Flexible or efficient
Ideal for businesses governed by seasonality, flexible supply chains ensure that products are available while demand is still high. Companies and organisations involved in flexible model chains need to ensure that the raw materials, inventory and transportation are all in place at the right time, so planning in advance and inventory management is crucial.
The Vital Role of Effective Supply Chain Management
Supply chain management is the creation, planning, processes, and management of a network of suppliers, manufacturers, retailers and logistics providers that can take a product through its journey from raw material to the end user.
The goal for supply chain management is to minimise wastage and cost, add value and optimise efficiency at every link in the supply chain. Good supply chain management will also anticipate potential problems and develop solutions accordingly to maximise revenue and reduce costs.
The Vital Role of Effective Supply Chain Management
Supply chain management is the creation, planning, processes, and management of a network of suppliers, manufacturers, retailers and logistics providers that can take a product through its journey from raw material to the end user.
The goal for supply chain management is to minimise wastage and cost, add value and optimise efficiency at every link in the supply chain. Good supply chain management will also anticipate potential problems and develop solutions accordingly to maximise revenue and reduce costs.
As supply chains have become more global in nature, businesses have come under greater pressure to ensure that the links in their supply chain reach certain ethical standards.
This might mean protecting workers' rights, particularly in the territory where the raw materials are sourced, or the social and environmental practices of suppliers. Visibility and disclosure are important for both you as a business and to your customers. Legislation like the Modern Slavery Act can call companies to account for their actions, so good supply chain management must also make transparency a key consideration.
Ask MSC
At MSC we can provide consultation and advice on optimising your supply chain and see where our range of shipping and logistics solutions may be beneficial. Contact us today to find out more.
