The Importance of Supply Chain

The importance of Supply Chain

What will you think when you see the words of Supply Chain (SPC)? You might think some brands such as DHL, FedEx and so on; you might have an idea that SPC means the cargo or container, or maybe, the post office around our daily life will pop in your brain. Yes, they are all right. However, we can only say that they are just parts of SPC. Above companies’ function are so-called “Logistics”, a department within a company or an organization in charge of delivering goods to end customers. Logistics is more about execution, but the SPC is more about planning, designing and strategy. The scope of SPC is wider and deeper. The real SPC is systems which involve not only departments within the company, but also cooperate with other companies to seek maximal revenues and reduce cost. The SPC is a system, processes which contains all of the information across different department invisibly, but actually purchase or deliver raw material or finish goods from factory to customer. SPC is a total solution from front end to back end, outside to inside, by exchanging information with your partner, regarding market fluctuations and production capabilities. This essay is going to discuss the situation, solution, evaluation and conclusion.

As a customer, I care about price, quality and warranty; I pay more attention on correct product mix, delivery time and inventory level if I was a distributor; I keep an eye on cost, revenues, market share when I was a vendor. No matter who you are, there are many factors which interweave together, but they all relate to SPC. The more quick reaction, the more business you gain. Therefore, efficient service becomes a slogan within enterprise. In the other words, customer wants the new product quickly, but companies don’t have sufficient confidence to have too much inventory on hand because products phase out so quickly. It becomes a popular topic that how to manage the inventory not too risky but enough to fulfill...