One of the most crucial lessons the global community has learned in the last few years is the importance of supply chains and their impact on daily life and business. When supply chains are functioning well, they go almost entirely unnoticed, but even a slight interruption at a critical point in a supply chain can send things into turmoil.
Let’s take a closer look at how supply chains function and how they can best serve your business.
What Is a Supply Chain?
A supply chain is a series of connections between companies, individuals, and various intermediaries that provides consumers and businesses with material goods. The parties involved in a supply chain can include:
- Raw material providers
- Product manufacturers
- Storage services
- Transport, delivery, and distributors
- Retail businesses
A supply chain may follow a simple series of linear connections, as the word “chain” implies, or form a more complex network of entities working together to deliver a product or service.
In this 21st-century economy, it is quite common for supply chains to take on an international scale, involving the cooperation of numerous entities around the globe.
The Impact of Supply Chain Management
Effective supply chain management is one of the most crucial components of almost any business and can be the difference between a company that thrives and one that flounders.
Supply chains typically consume a significant portion of an organization’s budget. Therefore, operating a supply chain efficiently and at a low cost is a tremendously effective way to reduce company expenses overall and improve the bottom line.
Well-functioning supply chains also contribute to an organization’s internal efficiency. When the people on your teams have everything they need without unnecessary costs, delays, and headaches, they’ll be in a much better position to deliver on their own business goals in the same fashion.
Finally, supply chains also have a significant impact on your customer satisfaction. Properly supplying your organization smoothly and consistently empowers you to provide your products and services to your end customers quickly and with a high bar for quality.
Mastering Your Supply Chains
Supply chains affect everything from what you buy at the grocery store to how fluidly you’re able to conduct your business. Taking the time to understand and appreciate how supply chains work within your organization can give you the chance to reduce expenses, operate more smoothly, and ultimately provide a better experience to your loyal customers.
With this basic understanding of supply chains and how they work, you should have everything you need to get started improving supply chain management in your business.