A supply chain is a type of network where all people, organizations, resources, activities and technology are involved in the creation and sale of a particular product. This process goes from the delivery of the original materials, that is, from the supplier to the manufacturer, and then, from the manufacturer to its eventual delivery to the final user. It is important to mention that the segment of the supply chain related to obtaining the final product from the manufacturer to the consumer is known as the distribution channel.
It is the set of steps that make up the preparation and distribution of a product for sale. It plans or coordinates the tasks of searching for, obtaining and transforming the elements, in order to be able to market a product and make it easily accessible to the public.
Throughout history, supply chain management has evolved from an initial focus on improving relatively simple but labor-intensive processes, to today’s engineering and management of complex global networks.
The supply chain has its origins in industrial engineering and in research which has its roots in logistics. Fredrick Taylor is considered the father of industrial engineering and focused his initial research on how to improve manual loading processes.
In the 1940s and 1950s, the logistic research approach was used to improve material handling processes and how to take advantage of space. The concept of “unit load” gained popularity and the use of pallets became widespread. In the mid-1950s, this concept was extended to transport management with the development of intermodal containers along with ships, trains and trucks to handle these containers. This was a prerequisite for the much later globalization of the supply chain.
The Production and Distribution Research Center was the first leader in innovation by combining map interfaces with optimization models for supply chain design and distribution planning.
The main characteristics of supply chains are as follows:
The objectives of a supply chain are:
Supply chains have different functions among which we can mention the following:
There are three different processes within supply chains, these are:
The different elements of the supply chain are:
It is based on two different dimensions that are used to describe, understand, analyze and be able to manage the supply chain, the horizontal and the vertical. Horizontal structure is the number of steps in a product chain that are: distributor, sales team and consumer. The vertical structure is the number of suppliers and customers in each tier.
There are two types of supply chains, these are as follows:
Supply chains are important because they encompass all activities that are related to the movement of goods from the supply of raw materials to the product reaching the hands of the consumer. This includes greater control over selection, purchasing, production scheduling, order processing, inventory control, transportation, warehousing, and customer service. In addition, it includes the information systems needed to monitor all these activities.
Some companies that work based on supply chains are: