Introduction to Logistics and Supply Chain Management

A supply chain is the system of all the individuals, organizations, resources, activities and technology involved in the creation/sale of a product. The supply chain ranges from the delivery of source materials from the supplier, to the manufacturer, through its eventual delivery, and to the customer. The eight important factors of supply chain management are preparing, data, source, stock, assembly, locale, transport, and return of goods. Every company needs an organized way to create their products and deliver. With out a system there would be complete disarray.

There are four major elements to the supply chain. Integration would be the first. When it comes to any project planning is always needed. In order to integrate communication is key. By communicating and working together you are guaranteed to get your product to the distribution stage. This in turn reduces waisted time and costs. At the same time, you can improve any imperfections through out the process. Element two is operations. With operations you can see if you are getting the most out of your production. You can delegate where you can cut down or increase workflow. Element three is Purchasing. You can’t create something from nothing. The purchasing field allows for the managing of supplies, materials, tools and equipment to manufacture your product. Element four of course is Distribution. This is where the money comes in to pay everyone else from the beginning of the supply chain to the end. Products must hit shelves to bring in net worth to allow for continuation of sales. Most manufacture’s use logistic systems to see what product is being delivered and the quantity amount being delivered. This allows them to see if they can keep shipment costs in house or whether a third party must be used to assure delivery.

Like the elements the supply chain also has flows or steps. The supply chain has 5 major flows. There is production flow, financial flow, information flow, value flow & risk flow. Production flow is how the product gets to the consumer and well as how the product is returned if need be (also known as reverse flow). Now we have financial flow. Questions any manufacturer would ask, how much is this costing us to make? What price could we put this product? How much to get it out in stores? What are we making off this shipment? Did we profit anything? Are we getting returns? It all comes down to profit. Of course, everyone wants to know what they are buying or selling. Which is where information flow comes in. What is this product? What does it do? How does it work? How much does it cost? Where was it made? etc.…

As the product moves around so do the prices of the product. Each point it reaches the price changes from the manufacturer down to the retailer. Finally, we have flow risk. Manufactures could face repercussions if products do not meet certain expectations. Therefor causing a ripple. Prime example, 2020 Cadillac CTS is released and on the market for purchase. A few months go buy of being on the market and air bags are reported to be defective. Therefor causing a recall on all models. This makes consumers hesitant to buy, costs manufacture’s money to fix, and there for causing a risk for money to be made.

Supply Coordination assures the function of any organization/ company. Supply coordination allows for daily activity to continue by following specific steps. This allows for minimal errors. Supply chain disruption can range from equipment malfunction to defected material. The coordination end could be disrupted in a way that could falter plans of sales.