To provide for supply chain optimization, you need to understand how a supply chain works and the basic steps involved in manufacturing and transportation. A supply chain links activities, data, and resources so goods can be manufactured, sourced, and moved from one point to the next. Usually, the goods are moved from a supply company to an end user. Supply chains that are complex span multiple locales and include several steps. The information below covers the basic steps that are used when explaining supply chain operations.
1. Sourcing the Raw Materials
In a supply chain, the materials used for manufacturing a product first must be sourced or the raw materials must be extracted. For example, if you are making fibre cement siding, you need to source the materials for this product. In this case, you need to source cellulose, which is made from wood, sand, and water. You also need to use cement.
Cement uses materials such as limestone, chalk, or shells and combines them with clay, slate, shale, iron, or silica. The slag from a blast furnace may be used too. You can see how this process can become complex if the product being produced uses several complicated or hard-to-get materials.
2. Refining the Materials so the Product Can Be Produced
Once you source the materials, either through mining, harvesting, or other means, you need to refine them. This process involves separating any substances that will prevent the manufacture of the product. You may also use this step to create the materials so they serve as components for the item being produced.
3. Assembling the Basic Components
Once you have refined the materials or made them into functioning parts, you need to assemble them so they can support the product’s overall use. When this is done, you will also need to create an outline that defines your expectations along these lines. This activity is necessary to ensure reliable quality control.
By establishing guidelines, you can explain the benefits of your products to potential buyers as well. Therefore, this part of the supply chain process is crucial to your overall selling success.
4. Finishing the Product
After you manufacture the parts for the product, you can complete the production process.
5. Checking the Product for Flaws or Defects
Before you store the product for sale and delivery, you need to make sure that it is flawless or that you have it quality checked. Once it has been approved, you can store the product and sell it.
6. Storing the Product and Tracking the Inventory
Once the basic components have been assembled and the product has been finished, you can store it until it is sold. Once the product is stored, it can be tracked for inventory purposes, especially after you start making sales. This information provides companies with what they need to know about production and supports their selling goals.
7. Selling the Product
With the information received from the manufacturer, salespeople can explain the benefits of a product that is now ready to be sold in the marketplace. This part of the supply chain process requires a regular review of a product’s demand and supply.
8. Delivering the Product
Supply chain optimization entails delivering the product in a timely fashion. Once the product has been sold, the customer usually will need it fairly quickly. In fact, some buyers require shipments that must be made in one or two days. This is the part of supply chain management (SCM) process where you can make or break a sale or prevent or create future sales.
Producing, organizing, tracking, and optimization activities are performed by supply chain administrators. They must provide timely, precise data to identify any problems and streamline the logistics or transportation of manufactured and inventoried products. The activities are crucial to the timely delivery of the products sold in the supply chain.