Supply Chain Management

Definition:

“the design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally.”

Definition from APICS

Average Supply Chain:

Average Supply Chain

The average suppy chain begins with the supplier´s supplier and ends with the customer´s customer.

Flowing forward in the chain are materials, tools, components, products and/or services.

Flowing backward in the chain are money and values.

Flowing both forward and backward are information and documents.

Supply Chain Hierarchy:

Supply Chain Hierarchy

Supply chain hierarchy identifies the leader of the chain as the company facing the final customer. It is the one who can estimate the real customer´s demand and who can capture enough information to forecast it.

In some occasions, the companies in the 1st level, don´t have the resources to capture data, process it, nor forecast consumption demand. In such cases, only 2 scenarios can happen:

1. The leader of the chain doesn´t have an stadistical certainty of the demand and replenish itself wrongly, originating a chain reaction backwards to it´s supplier and so on, with false data.
2. Suppliers in the 2nd level assumes the supply chain leadership investing in the 1st level company. Suppliers in the 2nd level can invest in three different ways:
• Taking stock levels regularly in the retailer.
• Requesting or purchasing customer´s demand from the retailer.
• Investing in billing and inventory systems for the retailer.

The ideal leader of the chain is the one who forecast demand reducing outliers and the who shares information with it´s suppliers and customers.

Supply Chain Network:

Supply Chain Network

The supply chain network is the complete drawing of the chain linked to our company identifying as much as possible all the different companies on it, their hierarchy and their business relations.