A supply chain for a product
As Mentzer (2001) has proposed there are 3 different types of supply chains, there is the basic one that contains the three basic participants in the supply chain; the initial supplier, manufacturer and consumer. There is the extended supply chain that has included another supplier who acts as a distributor and finally the ultimate supply chain that includes the initial supplier and the final customer.
The product in this case is Bacon; the initial supplier may be a farmer or a slaughter house. The supplier is the one who buys the raw material which in this case is pork and/or the raw bacon. The raw material is processed at the manufacturers and then packed and sold to a consumer. The immediate consumer can repack the products and sell them to the final customer. A supply chain is always in existence whether there is management or not. A supply chain calls for coordination in its operation.
A supply chain is said to be successful when all its participants share the same goal and focus, this is because it is not only the products that go through the supply chain but also money, information and services. The supply chain management overlooks the whole supply chain. The management ensures that the setting that aligns the operations of the supply chain within an organization and between one organization and another. The management also ensures that all participants of the supply chain are customer oriented or have a customer satisfaction goal.
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The challenges that the management of the supply chain faces are among others, lack of customer satisfaction in mind. The chain comprises of different firms that have to work together for the finished product to reach the final customer satisfactorily. This is not the case because as suggested by Ross (2003) when the manufacturer concentrates on the operating expenses therefore reduces the number of suppliers, then the customized demands increase, the orders will take a long time before they are processed and finally delivered to the customer.
One of the effects of globalization is that the customer has a range of competitive prices to choose from; therefore some organizations have been proactive and created the delivery services that cater for the customer within the time limit. The supply chain is faced with a challenge of having less returns because of its operating costs, the supply chain should incorporate technology that will reduce its expenditure and yet maintain the customer satisfaction.
This new technology is supposed to reduce the time taken to process an order and be able to deliver it according to the customer’s specifications; therefore the issue of reducing the number of suppliers should be catered for when one introduces the technology. The supply chain technology should also be able to control the firm’s production in terms of; producing a certain product when it is in demand and one is ensured that the customers will buy it, at a certain rate and the location of the deliveries.
Another challenge that the supply chain faces is lack of planning. A plan of how to execute operations is essential in any successful firm. Similarly a supply chain needs plans of how to maintain their customer satisfaction while reducing the operating costs and making the right decisions. An effective supply chain is in the management’s planning and use of technology while staying in the competitive global market.
Mentzer T. J (2001) Supply Chain management. Sage Publishers Ross A (2003) Dynamic factory Automation. McGraw Hill