Understanding Your Link in the Supply Chain
by Larry Slusser on March 17th, 2008
In order to be effective in the supply chain, it is important to understand what a supply chain is and why it is important to implement a supply chain management system. Supply chain management is loosely defined as the process of moving a product from the manufacturer to the consumer. The different aspects of the process work closely together, forming a chain, which requires close attention and management.
There are some processes that are very simple with only a couple of different suppliers. There are other processes that are extremely complex that require several suppliers, where a solid supply chain management system is imperative to the success of the product. It is important that all suppliers are knowledgeable about all aspects of the supply chain.
Supply chains can be strong, but are usually as strong as its weakest link. The most successful supply chain management for any company must be supported by top management’s commitment-top down. No matter what the size of the company, it is imperative that people in key positions understand the whole process and how all pieces of the supply chain are affected, not just within their own organization. In essence, it requires cooperation from all aspects of the supply chain in order to be successful.
There may be instances where you would need to be more involved in the supply chain, such as when there are some outsourced functions that are part of the supply chain. An example of this would be if you are using an overseas supplier where there are longer lead times and a higher probability for disruptions. Good supply chain management is critical where timing can disrupt or break the chain. Having a back up plan that is a legitimate option in a time of crisis is imperative. Usually a supplier would like to have some volume with you and you can diversify your suppliers enough to have some flexibility if the situation demands it.
Additionally, when you are working with different suppliers who make up the supply chain, establishing efficient communication of information is imperative. Having efficient communication will not only help to ensure that there are no disruptions in the chain, but that compatible communication is established. Specifically, ensuring that the technology is up-to-date is important, by all suppliers involved.
Implementing an effective supply chain management system will join the links of the chain, together with compatible information technology and making sure that all the suppliers are knowledgeable about the process. Moreover, the suppliers who are quick to respond, with reliable and quality products or services, are the ones who will get the business.