It is important to give uttermost attention in developing a long-lasting business plan, one that withstands the unexpected storms of problems that occur along the way in an industry’s operations. In the current market, the supply chain management is central in ensuring a steady supply of goods and services to meet client’s demands.
To produce and supply the best items to consumers, an efficient supply chain process is vital. How is it realized, and which entities are essential in its development? This article describes that in form of stages involved.
Stages involved in developing a supply chain
Just as links are important in making an actual chain, the business supply chain has imaginary links inform of component and entities through which an original item passes through to the finished product. It does not stop at that, it goes to the market place for utilization and if not satisfactory, back to the company.
The entire links are necessary when considering the stages involved in developing a route for a supply chain to operate through. Five steps are involved:
- Planning
- Sourcing
- Manufacturing
- Delivering
- Return
Planning
This initial stage involves strategizing on the plan that works best for the client, saves on costs of production, and brings in maximum profits. It is at this primary stage that these two questions are addressed; what should be done and how should it be done?
This is the most crucial stage in supply chain development, one has to get it right at this stage, if not, preceding stages will flop. One has to be alert to opportunities within and outside the industry’s environment. It is paramount to recognize what to do to realize profits from the opportunities at hand.
Once what should be done is decided on, short and long-term objectives are established for the whole company and stakeholders. Objectives give directions to all who are involved in assigning them duties to carry out.
In the face of the uncertain future, both external and internal uniform premises are developed. This is assumptions arrived at based on learned predictions from policies used in the past and current plans.
Since many situations can be dealt with in different ways, it is logical to try to create a number of reasonable alternatives that can be used instead of sticking to the routine style of operation.
The alternative plans are supposed to be put to thorough scrutiny to weigh their merits and demerits.
Once they are put to the test and carefully weighed, a seemingly formidable decision to arrive at has to be made and the alternative that merits the most is picked. The right plan should show feasibility, make the highest profit, be cost effective and adaptable to change.
The best plan chosen becomes the primary plan to go by. At the same time, a secondary plan(s) is needed to give support to the primary one. In essence, the secondary plan is not an option-b plan but part of the original one.
The last bit of planning involves implementation. All arms of the firm involved in production take to work to fulfill the objectives designed during the early phases of planning.
Sourcing
After a clear plan is developed the procurement stage in which potential suppliers identified and vetted. To ensure cost efficiency, negotiations are conducted. In the end, the supplier who attains the best value is selected, a contract defining particulars of the procurement agreed on and terms and conditions for supply arrived at.
Essential components of the sourcing process involve recognizing the need, assessing the supply market, development and execution of strategies concerning market interactions.
Manufacturing
This stage involves making a product- a good or service- that is in high demand in the market. The processes involved differ in relation to the product being manufactured. The general operations encompassed here are, product design, production, examined to meet certified market standards, packaged, and passed out to be delivered to the market.
The supply chain manager arranges for the manufacturing phase to run as planned. He ensures that all departments carry out assigned work and deliver on time. It is at this unit that workers’ output is required the most because they determine quality levels and final output of production.
Delivering
Required logistics that concern the processing of clients’ inquiries is dealt with at this point. Factories and institutions collaborate to deliver orders in customers’ receipts. They also establish specific networks of retail stores to deliver buyers’ orders.
Often, the suppliers make this phase possible. Usually, the distributor is the link between the company and the market. The modes of transport involved could be by road, air or sea.
The delivery phase comprises of the warranty period, invoices are issued to consumers and retail shops, and payments done. Specific manufacturers handle paperwork and data requirements for exporting and importing the completed products.
Return
In the supply chain, this is the last stage. Customers are allowed to return defective products to the company. These goods might have been received from the supplier having the defects or damaged along the line during shipment. The customer service department deals with questions and complaints and strives to respond and settle their problems effectively.
This is the most undesirable and problematic stage in the business chain. An effective and flexible system for taking back damaged products and aiding a quick return procedure is required. Especially in today’s global economy where competition soar each day, such a policy is vital to keeping one’s customer.
To ensure an effective supply chain, companies should establish clear rules on how to control the return and replacement of defective products.
The Bottom Line
For the operation to realize quality goods and services to meet the consumer’s demand, proper planning is key. As discussed, if the planning is not done correctly, the subsequent stages are doomed to fail, and the objectives, vision, and mission of any business organization end up not being realized. The efficacy of the supply chain in a company is dependent upon all stakeholders realizing their roles in a professional way.