SANDRA POBLETE & GEMMA MESTRE
The supply chain is formed by all the processes involved, directly or indirectly, to satisfy customer’s needs.
The aim of it is to improve the productivity of the logistics’ system, increase the level of customer’s service and finally, obtaining a better operational administration.
Depending on the business’ sector in which are involved, we find different types of supply chain: in the service sector the supply chain is smaller than in the industrial one where a lot of logistics’ service are needed because raw materials have to be transformed. Moreover, in the business area the supply chain is less elaborated.
The principal components of the supply chain are the selection of partners to share earnings and costs associated to the transactions. Also, the supply networks are important to the distribution. Designing and support processes is another considerable component in relation to the cost reliability, response time and flexibility. Moreover, the systems which we use are relevant to report and control systems. Finally organizational structure helps to support the supply chain strategies.
In order to know how to design a supply chain, we should have in mind these steps:
- Firstly, it is important to have clear the company’s strategy, this means the products or services the company offers (strategic activities), the market where they will be sold or for who they are thought. Therefore, the objectives must be defined and they have to be real and specific as well as, its cooperation strategy and distribution center.
- When the strategy is defined, it is time to make use of it in order to achieve the strategic goals and be competitive into the market.
- Another point is to give support to the competitiveness strategy understanding customers’ requirements, distribution channels and product characteristics in an accurate and integrated manner.
- Then, a distinguished point will be to align the company’s strategy with the supply chain strategy we are designing. This supply chain strategy has to keep in mind the components we talked before, otherwise, it will be not efficient.
- Finally, the supply chain strategy must be updated, this means that the company can change by its environment or by itself and if it happens, the strategy has to be redesign so it show the exact representation of the company.
As we know, retailing business doesn’t have much money to spent in transport or logistic business because its competence is bigger than them. Moreover, the stock of the firm represents a big cost, if we add the logistic and transport of the firm the cost management increment so much. So, what they have to do is to reduce costs putting the warehouse as close as possible. Because of that, they don’t have to move anything by transport, also the time to take the product from place to place will be less. To sum up, what we have to do is to ensure a balance between demand and supply with time and cost.