A Supply Chain Is a Network That Include Retailers.Docx

A supply chain is a network that includes retailers, storage facilities, distributors, transporters and suppliers that contribute in the production, delivery and sale of a product to a consumer. (Wisegeek, n.d.) Benefits of managing a supply chain are faster inventory turnover, less warehouse space needed, better cash flow management and working capital, fast response to sales surges and fads and less safety stock. (Collier, 2014)

Managers are faced with many issues when it comes to designing a supply chain. Efficient supply chains are designed for efficiency and low cost by minimized inventory and maximizing efficiencies in process flow. Responsive supply chains focus on flexibility and responsive service are able to react quickly to changing market demand and requirements. Push systems produce products in advance of customer orders using a forecast of sales and moves them through the supply chain to points of sales where they are stored as finished goods inventory. A pull system makes only the goods needed at upstream stages in the supply chain in response to customer demand signals from downstream stages. (Collier, 2014)

If an incorrect framework is used it could cause slower inventory turnover, less cash flow and slow response to sales. Supply chains include everything from in house parts to parts that are supplied from outside sources. Choosing the wrong framework can be the difference of success or failure. Success means more profit and failure means loss of profit and can also mean the failure of the business as a whole. Examples of incorrect framework are Adidas in 1996 had issue with their warehouse systems and related DC automation which wouldn’t work and led to an inability to ship which caused a loss of market shares that lasted for a long time. Another example is Denver Airport that opened in 1995 and could not manage the luggage because of a failure of the automated and very expensive system that never worked properly and was...