Your Business’s Supply Chain: How It Works and Why It Matters

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Business’s Supply Chain

If you run a business that makes any kind of product, you should realize you have a supply chain in place. Your supply chain involves a process sequence. If you observe it, you will see that it includes a commodity’s production and distribution.

You might have a supply chain that creates high-quality agri products for all your agricultural needs. You may have one that produces pet supplies. No matter what products the supply chain turns out at the far end, you must understand how yours works as a business operator or owner.

We will get into more detail about supply chains in the following article.  

The Basics

Supply chains often involve complex logistics. Typically, your supply chain starts with a facility or facilities where you process the raw materials. If you are making bread, you would process the wheat for it at these facilities.

You create a finished product at that facility, or you may move the partially-finished product to another location where the refinement process continues. Once the raw materials go through the necessary steps, they’re ready for packaging.

The packaging probably occurs at that same facility. Then, the finished products, in their packages, move from that facility to stores where people can buy them.

You may also have a situation where people purchase the finished products online, and the manufacturer sends them to that buyer directly. In eCommerce setups, the supply chain moves this way. 

You’re not moving the finished products to store shelves where customers can buy them. You’re essentially skipping a step.

Supply Chain Management

If you break down supply chains and how they work like this, the whole process sounds relatively simple. However, the logistics that you must examine when determining the supply chain’s best practices aren’t always straightforward at all.

Think about what goes into getting the raw materials into the consumer’s hands. You must consider how you will harvest the raw materials. You must think about whether you can do it with machines or whether you need human workers.

Next, you must consider whether you require humans in the factory or other facility where you create your product from raw goods or whether you can automate that process. Maybe it’s a combination of automation and using human workers.

Then, you must think about how you’ll package the products. Can you automate that, either fully or partially?

You must figure out how you’ll get the products onto the transportation methods that take them away to your manufacturers. Will you need individuals operating pallet jacks? Will you use trucks for moving the products to the stores that stock them, or do you need planes or boats?

Supply Chain Managers

As the company’s owner, you might help this whole process along, but you probably have other responsibilities as well. You might spend your time helping to craft your next major ad campaign. You may need additional funding, so you might approach banks or credit unions. You may contact angel investors or venture capital firms if expansion interests you.

That’s why you’ll probably need a supply chain manager. They can help with all of the logistical issues that we just mentioned.

They can help put your supply chain in place, and they can constantly oversee it. If you can’t get raw materials through one source, they might know about another you can use. They may know about alternate shipping methods or routes if your preferred one isn’t working for some reason.

You may even need multiple supply chain managers if you have several factories where you make your products. The larger and more complex your business, the more help you’ll need.

Automated Supply Chain Tools

You can also look into automated supply chain tools these days that feature AI. The artificial intelligence behind the supply chain software you use can make suggestions, just like a human supply chain manager can. You might use that software if you’re planning international expansion or have some ideas for the business that you’ll soon implement.

The better you understand your supply chain and how it works, the more success your company should have. If you hire only the most knowledgeable individuals and if you use the latest technology whenever possible, you should do well.

You can dominate your niche if you have a supply chain that is working just as it should. If you run into supply chain issues, you must quickly fix them, or your competitors can pull ahead.

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