Company Supply Chain Paper

Essay by aaron766University, Bachelor'sA+, November 2009

download word file, 3 pages 3.0

Having an effective supply chain is critical to the success of any type of business, big or small. The definition of a supply chain is the stream of processes of moving goods from the customer order through the raw materials stage, supply, production, and distribution of products to the customer. Through such a detailed network, the distribution of goods and services makes its way from supplier to consumer.

Supply chain management is the overseeing of the chain of events in this process. Effectively managing this chain is key, through coordination of all the separate pieces of this chain as efficiently as feasible without incurring a loss of quality or satisfaction from the viewpoint of the customer, all while maintaining minimal expenditures in order to increase profit margins.

There are a number of key elements found in a supply chain: Production, Supply, Inventory, Location, Transportation, and lastly Information. This first element in developing an effective supply chain takes under advisement what and how many goods to manufacture, and if need be, what additional pieces should be outsourced or procured from qualified sources.

Within the second element, supply, a company must calculate what their facility are capable of producing with high quality margins, while also maintaining economic efficiency. Almost all companies are incapable of producing every component they require while still providing high quality and low costs, therefore outsourcing almost inevitable comes into play in order for all necessary parts to be acquired with lowered costs in mind.

A harmonious balance between too little and too much should exist in the third element, inventory. Inventory decisions revolve around keeping an optimum level of stock on hand in order to guarantee customer satisfaction in a fluctuating market. Such levels of stock are critical to the daily operations of businesses and in keeping...