Within organisations, such as a manufacturer or distributors, supply chains will include all the areas involved in receiving and fulfilling any customer requests.
These functions include, but are not limited to;
New Product Development/Research and Development (R&D), – New product development (NPD) refers to all efforts to create a new product, process or service. This involves, generally, a five-stage process of the idea generation, a business and/or technical assessment, the product or process concept development, engineering and design of the product or service and finally, the building of the prototype with testing and pilot.
Marketing – This is a management process where goods, products and services are moved from being a concept to reality for the customer. Within marketing, there are generally four processes known as the four Ps.
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- The Product identification, selection and development,
- The determined Price of the product,
- The selection process of distributing the product to the Place of the customer,
- The Promotional development and implementation strategy.
Procurement/Purchasing – Purchasing personnel are in a position to consider every stage of a business’ processes, from raw materials to waste management and can aid in identifying ways of making efficiencies and opportunities to improve product quality.
Suppliers are linked with Procurement and Purchasing as it is usually the responsibility of this function to source the right suppliers to match their business requirements. Suppliers are the individuals or businesses that provide goods and services to a business and, as such, do not have much interaction with the customers directly.
Logistics Services – Usually broken down into further functions logistics includes vital functions such as transportation of materials, end-products, and equipment, and the inventory and warehousing of parts, packaging, and of course, finished products.
Transportation – Transportation determines the efficient movement of products and without a developed transport system, logistics could not bring its advantages into full play. A good transport system provides better efficiency, reduces operation costs and promotes service quality.
Warehousing – Warehousing facilities play a vital role in the overall supply chain process. Warehousing itself is the performance of the admin and physical functions that are required to store goods and materials.
Distribution – Distribution is the movement of goods and services from the original source to completion to the final customer with the flow of payment in the opposite direction to the original supplier.
Planning – Again, planning is something that happens at almost every stage of a E2E supply chain and is vital to forecasting the requirements of their products, be it raw materials or finished products. Planning also considers the requirement of transport, warehousing space, inventory levels employees, and so much more. The two types of planning commonly referred to are;
Demand planning – This process is used to create reliable forecasts and can guide users towards improving the accuracy of revenue forecasts whilst aligning inventory levels and enhances the chance of profitability for a product.
Supply planning – Supply planning helps in predicting of future requirements in order to balance supply and demand. Supply chain planning products can include modelling and design, distribution and supply network planning and look at co-ordinating assets to best plan the delivery of goods from the supplier to the customer.
Manufacturing – Supply chain management affects manufacturing companies in different ways and includes the availability of inputs that are needed for production processes, costs and profitability of manufactured items. The need to understand ways that supply chain management can affect manufacturers from both a daily operational perspective and a strategic viewpoint is important for all managers in the industry.
Linked closely with Manufacturing and, in many cases, part of the same department or function, you will find Operations and Quality Control.
Operations – Operations management involves the activities, decisions and responsibilities of managing the resources that are dedicated to producing and delivering products and services.
Quality Control – Often referred to as quality assurance, modern consumers want to be confident in the products or services they are purchasing. Procurement departments want to work with suppliers who have rigid protocols in place to provide assurances that the companies they are working with are going to provide parts and products that match their specifications and that they will be monitoring production. Quality Control can prevent faulty goods, high-volumes of returns and damage to a brand’s reputation!
Customer Services – Customer service is the service that is provided to customers before, during and after the purchase and use of goods and services and can produce satisfied customers. Bad customer service can generate complaints which, in turn, can result in lost sales as consumers may take their business to a competitor.