If you have attended a business seminar before, you probably have a grip on what supply chain processes entail on a global level. The basic definition incorporates several stakeholders linking one to the other to satisfy a market’s need. The string pulls together various people, establishments, activities, companies, data, and resources. Find about the stages in the supply chain.
At the bottom line lie the customers who, without their involvement, the supply chain crumbles. Despite the market base, if various stakeholders don’t adhere to proper coordination, the whole process is bound to fail. If you are into this venture, the supply chain management process steps are not new to your portfolio. To familiarize yourself with the stages in the supply chain process, read this article to the end.
Extraction of raw materials
The first stage involves moving raw materials from their source to the company that converts them to a finished product. Before the materials get to the company, though, several stakeholders and documentation are put in place. The companies purchase the raw elements in bulk from initial sites and transport them by sourcing services from transportation firms. The transportation could be based on a contractual arrangement or company-owned trucks.
The supply chain management buys raw materials in bulk to cut costs and maximize profit when selling the finished product. The management is alert on buying quality material to avoid losses. Once at the company, the bulk undergoes manufacturing while the factory stores the rest. The managers should make adequate arrangements for a spacious place to keep the raw material awaiting manufacturing.
Manufacturing into primary parts
Before arriving at manufacturing, several activities must have been in place. Aspects such as planning, designing, and prototype testing should have been put in place. Until now, the company management has gone through all the needed steps to formulate a smooth and efficient manufacturing process. For the stages in the supply chain to proceed, you would require substantial space, equipment, and personnel. Consequently, if you want to continue the manufacturing process repeatedly and reliably, you will need to institute a longtime sustaining strategy.
When testing the prototype, do a thorough and critical assessment to identify the flaws with the design. The supply chain management team working at these stages in the supply chain ensures that their product comes out with the least possible errors. Doing so helps to realize a high-quality product that will comfortably settle in the consumer market.
After prototype testing and satisfaction, the product undergoes the process of manufacturing. At this phase, the management is sure of what to expect as far as the final product is concerned. Other aspects as batch numbers and the process involved in manufacturing come into play. The procedure that the managers will settle on should be the most cost-effective one, without jeopardizing quality production. Additionally, non-profitable procedures should not be included in the manufacturing of basic products.
The assembling of basic parts into the final product is a stage that requires little expertise than the previous stage in most companies. In some supply chain process steps, the parts have to pass from one station to the next for joining. As such, these workstations are well coordinated to ensure synchrony in what is expected of each link. Mechanical means aid in moving semi-finished products to strategic locations for fixing. Forklifts and cranes come in at this level. This method is better than the employing manual means that are slower and costly.
Assembly lines are common in many companies ranging from food, clothing, medicinal to software and automobile industries. The production team cuts on human labor as much as possible. Conveyor belts and motorized automobiles come into play to limit workers’ movement in the manufacturing place. If different companies are working on the same product, the coordinators do well to ensure high-level synchrony. Such a strategy ensures cost-effective production by sharing production roles. As such, no single company has to accrue the costs of purchasing all the types of machinery, but only the ones it requires at its assembly stage.
Delivering products to end-user
This stage involves the link between the manufacturers and the consumers. Effective coordination by the managerial team will ensure that the buyer-supplier relationship is stronger. This good rapport optimizes the product’s competitive position in the market and the entire chain at large. This phase requires a high-quality supply of services to the consumer within a time the supplier and client agreed upon. It is a sensitive stage in supply chain management in which the product has to assimilate within the market base to realize a profit. Quality goods should be reserved for all customers to stamp the establishment of the product in the trade.
To be successful at this level, the management should do a thorough study of the demography, supplier-location, and apt delivery of consumer needs. The closer the consumer is to the market, the better the chance of commanding a large market base. A good return policy in place will enhance the satisfaction of customer needs. As such, the suppliers receive the damaged items and serves the customer with substantial substitutes.
The supply chain management process steps involve more than moving raw materials to companies for production. Likewise, a lot occurs when the finished product passes on to the suppliers for distribution. In between, numerous logistics come to the board to ensure proper synchrony between the supply chain stakeholders.
You can summarize the stages of a supply chain into four main stages as above. The processes involved can be daunting to coordinate without a properly defined management team. For that reason, the supply chain management team comes in to align the activities of the project with the stakeholders. At each phase, the directors aim at cost-effective measures to eliminate unnecessary procedures. Communication is crucial in aiding a feasible plan that will withstand various adverse market changes. However, if you want to integrate your business on an international scale, you do well to make thorough plans beforehand. Global supply chains are more complex than domestic ones due to the large size of factions cooperating. Additionally, you will have to bear with other setbacks from transnational related operations.