What are supply chains and their relationship to improving the management of your business?

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Supply chains are a complex network of organizations and activities that transform raw materials and components into a finished product delivered to the customer

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What are supply chains and their relationship to improving the management of your business?
What are supply chains and their relationship to improving the management of your business?
Supply chains are a network of all individuals, organizations, resources, activities and technology involved in the creation and sale of the product supply chains include everything from delivery of source material from supplier to manufacturer until final delivery to end user, The supply chain part of bringing the finished product from the manufacturer to the consumer is known as the distribution channel For more precise details, please continue reading.
supply chains

What is supply chain management? 

Supply Chain Management (SCM) is the supervision of materials, information and finances as they move in a process from supplier to factory to wholesaler to retailer and then to consumer. The three main flows of supply chains are product flow, information flow and money flow. These occur across three main stages: Strategy, planning and operation, supply chains include coordination and integration of these flows within and between companies.
The concept of supply chain management is based on two basic ideas:
- First idea: Each product that reaches the end user in practice represents the cumulative effort of multiple organizations, and these organizations are collectively referred to as the supply chain.
- Second idea: Although supply chains exist for a long time, few companies have understood their importance, not to mention managing the entire chain of activities that ultimately led to the delivery of products to the end customer, and the result has been disjointed and often ineffective supply chains.
The management of supply chains requires active management to maximize customer value and achieve a sustainable competitive advantage, which requires a conscious effort by supply chain companies to develop and operate supply chains in the most effective and efficient way.

What are the main supply chain models? 

Many types of supply chain models are available, and the model chosen by the company depends on how the company is structured and what its specific needs are. Here are some examples of this:

Continuous Flow Model

This traditional supply chain model works well for companies that produce the same products with little difference, as products must be in high demand and require little redesign, this lack of volatility means managers can streamline production times and maintain strict inventory control.

Quick Chain Model

This model works best with companies selling products based on the latest trends, and companies using the Fast Supply Chain Model need to quickly put their products on the market to take advantage of the trend.

Flexible Model

Companies use a flexible supply chain model that makes seasonal or holiday goods, and these companies see sudden surges in demand for their products followed by long periods of demand, little or no, and flexible supply chains ensure they can quickly prepare to start production and close efficiently once demand decreases.

Importance of supply chains 

The main reasons for the importance of supply chain management include:

1. Lower costs

Supply chain managers often focus on reducing costs incurred at all steps within the supply chain and improving production processes, relations with suppliers and inventory management are some of the ways in which supply chain managers can try to further reduce costs and the overall benefit of cost reduction at all stages of supply chains is to increase the company's profits, Even reducing the cost of items by a few sharks can save millions of rials if you do.

2. Low inventory

Effective supply chains can reduce the need to maintain inventory, thereby reducing the overhead costs associated with storage and security, however, extremely lean inventory increases the pressure on distribution networks and reduces the ability to cope with supply chain shocks, so it is important to determine your optimal stock level.

3. Enhancing communication and interdependence

Consumers, distributors, producers and suppliers communicate constantly with each other as materials and components are transformed into finished goods that end up in the hands of consumers, so it is essential for supply chain managers to focus on vision and communication between all components as well as on the growth of their institutions, partnerships and outsourcing.


4. Transfer of information and communications

The management of supply chains (SCM) is a need to establish all communities, and effective communication and real-time transmission of information is a need to establish strong supply chains. This begins by building strong relationships between all components of supply chains and ensuring that communication is easy and that all parties are aligned with a common goal Since the information flows backwards from the end consumer to the supplier, Supply chain managers should minimize any delays or errors in information transmitted from one chain link to another.


5. Improving the financial situation

Companies value supply chain managers because they help control and reduce supply chain costs And this can lead to significant increases in the company's profits, Supply chains also reduce the use of large fixed assets such as factories, warehouses and transport vehicles in the supply chain If supply chain experts can redesign the network to properly serve customers from six warehouses instead of ten, the company will avoid building four expensive buildings.

6. Better Customer Service

Effective supply chain management can provide direct customer service improvement and this is because SCM operations will ensure that the right quantity of the right items is delivered in a timely manner, A coherent network of suppliers and distributors will reduce delays and improve customer satisfaction where customers expect the right product range and quantity to be delivered, The products should be available at the appropriate location, in addition, Supply chain management will usually increase visibility and allow both customers and customer service staff to know the status of each order at all times.

7. Risk mitigation

Supply chain management, which provides a supply chain vision from start to finish, is critical, and not just financial risks can be mitigated. More visibility across all your suppliers can reduce reputational risks from inadvertently interacting with a company that breaks environmental, social and governance standards. Your ESG, or company operating in an internationally sanctioned country.


New production methods and consumption behaviors lead to the emergence of new supply chains. At the heart of these changes, the management of modern supply chains must be reinvented without modifying all their operations. Through new tools and innovative methodology, supply chains will be renewed and will rise to the challenge of their evolution and competitiveness.

Other topics:



1. < < Five gradual changes to improve supply chain performance > >, supplychainbrain
2. < < Supply chain: slow logistics > >, voxlog

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