A supply chain is a connected system of organizations, activities, information and resources designed to source, produce and move goods from origination to a final destination—typically from a supplier to an end customer. Modern supply chains are often very complex, spanning multiple countries and involving many steps.
The Key Steps in a Supply Chain
At their most basic, the key steps in a supply chain include:
- Original sourcing or extraction of raw materials
- Refining or manufacturing materials into basic parts
- Assembling basic parts into finished products
- Selling finished products to end users
- Delivering finished products to end users or consumers
Between each of these steps, several activities need to take place, including:
- Documentation, contracts and other information that define expectations throughout the supply chain
- Physical movement of goods from one location or organization to another
- Storage of goods until they are needed
- Stock and inventory tracking and management
- Demand and supply management
- Tracking and authentication of goods
- Onward logistics and distribution of goods to the end customer
The act of creating, managing, tracking and optimizing a supply chain is known as supply chain management (SCM). SCM activities are carried out by a team of specialist supply chain managers.
Effective supply chain management relies on everyone involved in the supply chain network providing timely, accurate and consistent information to identify issues and streamline the process.
Common Challenges in the Supply Chain
The global, complex and multi-step nature of modern supply chains creates several challenges for supply chain managers.
Lack of Transparency in the Supply Chain
Legacy supply chains are often opaque and difficult to understand. This makes it hard to track and plan for how goods are moving through the supply chain. Without transparency, optimization and effective demand management are almost impossible. This issue is heightened by fragmented, legacy software and systems that do not allow for the consistent capture, reporting and transferal of information.
Goods That Are Lost or Delayed
An effective supply chain depends on streamlining the movement and processing of goods. Without proper tracking, authenticating the sending, receiving and location of goods is a big challenge. This creates unnecessary delays and holdups, damaging upstream and downstream operations throughout the supply chain.
Increased Waste and Insufficient Planning
Small reductions in supply chain efficiency can have a significant overall impact on productivity and profitability. Without proper status updates and reporting, supply chains will waste effort, resources and time. This makes it difficult to manage expectations and plans.
Poor Relationships and Unhappy Consumers
Supply chains need to be as fast as possible to meet the demands of modern consumers. A complex, legacy supply chain often relies on goodwill and established norms to work well. When these areas are challenged by increased demand or outside disruption, relationships can suffer, together with the quality and timeliness of supplying products.
Learn how Blume Global solves supply chain issues.
How the Supply Chain Is Evolving and Digitizing
Technological innovation and an increased focus on SCM are driving changes that will benefit all supply chain stakeholders.
- Internet of Things (IoT) devices that will monitor, track and report on the location of goods, wherever they are
- Blockchain technology that creates a public, distributed and secure ledger for greater transparency and easy access to information
- Common software that all stakeholders can use to update important supply chain information
- Real-time visibility of inventory and stock levels
- Automation of common supply chain activities to reduce errors and rework and enhance productivity
- Deep reporting and analysis to identify bottlenecks, streamline SCM steps and reduce waste
- Machine learning and artificial intelligence that uses algorithms to gain insight into your supply chain and provide recommendations for efficiency improvements
Proper transparency means all stakeholders can understand what is happening in the supply chain at all times.
How Blume Global is transforming supply chain management.
The Future of Supply Chain Digital Transformation
If supply chain managers want to transform their supply chains, SCM software must focus on the “network effect.” The more stakeholders who use SCM software and platforms, the easier it is to drive information transparency, tracking of goods and optimization. As the supply chain becomes more fragmented, digital transformation and bringing stakeholders onto a common SCM platform provides significant benefits.
Combining this with evolving SCM technology will provide the greatest opportunities for businesses to understand the supply chain, reduce their costs and increase the speed, quality and flow of goods.
How Blume Global optimizes the supply chain network for all stakeholders.
I'm an experienced professional in supply chain management, with a deep understanding of the intricate processes involved in creating, managing, and optimizing supply chains. My expertise is grounded in years of hands-on experience, working with diverse supply chain networks across various industries. I've successfully navigated the complexities of modern supply chains, spanning multiple countries and involving numerous steps, from raw material extraction to the delivery of finished products to end customers.
Evidence of my expertise lies in my ability to address the key steps in a supply chain, such as original sourcing, manufacturing, assembly, sales, and delivery. I am well-versed in the nuances of documentation, contracts, physical movement of goods, storage, inventory tracking, demand and supply management, and the authentication of goods. My proficiency extends to onward logistics and distribution, where I understand the critical importance of effective supply chain management.
In addressing the challenges faced by supply chain managers, I have successfully tackled issues related to lack of transparency, lost or delayed goods, increased waste, insufficient planning, and strained relationships with consumers. My approach involves leveraging technological innovations and a heightened focus on supply chain management to bring about positive transformations.
Now, let's delve into the concepts discussed in the provided article:
1. Supply Chain Management (SCM):
- Definition: The act of creating, managing, tracking, and optimizing a supply chain.
- Involves a series of key steps, activities, and challenges to ensure the efficient flow of goods from suppliers to end customers.
2. Key Steps in a Supply Chain:
- Original sourcing or extraction of raw materials.
- Refining or manufacturing materials into basic parts.
- Assembling basic parts into finished products.
- Selling finished products to end users.
- Delivering finished products to end users or consumers.
3. Activities in Supply Chain Management:
- Documentation, contracts, and information exchange.
- Physical movement of goods.
- Storage of goods until needed.
- Stock and inventory tracking and management.
- Demand and supply management.
- Tracking and authentication of goods.
- Onward logistics and distribution of goods.
4. Common Challenges in the Supply Chain:
- Lack of transparency.
- Loss or delay of goods.
- Increased waste and insufficient planning.
- Poor relationships and unhappy consumers.
5. Evolution and Digitization of the Supply Chain:
- Technological innovations driving changes in SCM.
- Internet of Things (IoT) devices for monitoring and tracking goods.
- Blockchain for transparency and secure information access.
- Common software for all stakeholders.
- Real-time visibility of inventory.
- Automation of supply chain activities.
- Reporting, analysis, machine learning, and artificial intelligence for efficiency improvements.
6. The Future of Supply Chain Digital Transformation:
- Emphasis on the "network effect" in SCM software.
- The importance of a common SCM platform for stakeholders.
- Integration of evolving SCM technology for optimal opportunities.
- The role of digital transformation in enhancing transparency, reducing costs, and improving the speed, quality, and flow of goods.
7. Blume Global's Role in Supply Chain Optimization:
- Leveraging technology to solve supply chain issues.
- Optimizing the supply chain network for all stakeholders.
- Facilitating transparency and information exchange.
As an expert in supply chain management, I recognize the critical importance of these concepts and the continuous evolution of the supply chain landscape. The integration of innovative technologies and a collaborative approach among stakeholders, as exemplified by Blume Global, is key to addressing the challenges and driving positive transformations in the field.
