The Supply Chain – GCSE Business WJEC Revision

Understanding the Supply Chain

The supply chain comprises of all parties involved, directly or indirectly, in fulfilling a customer request.
It includes manufacturers, suppliers, transporters, warehouses, retailers, and customers.
The main operations of a supply chain are product development, marketing, operations, distribution, finance, and customer service.
Supply chain management (SCM) involves the active management of supply chain activities to maximise customer value and achieve a sustainable competitive advantage.

Raw materials procurement: These are the basic ingredients used in the production process.
Manufacturing and production: This involves converting raw materials into finished goods.
Storage and inventory control: This comprises storing and closely tracking and controlling inventory.
Distribution: This is the process of delivering the finished goods to the markets.
Customer service: Post-sales service and support to customers.

SCM dramatically increases the visibility of information flowing through the supply chain.
Effective SCM can lead to cost reductions and increased profitability.
Improvement in delivery and fulfilment speed, delivering right products to the right location at the right time.
Enhanced customer satisfaction and service, which improves customer trust, leading to increased sales.

Planning: Choosing the best products, establishing the best supply chain, and predicting future requirements.
Sourcing: Picking the suppliers that will deliver the goods and services needed to create the products.
Making: Manufacturing the product, testing it, packaging it, and scheduling its delivery.
Delivering (logistics): Coordinating the receipt of orders from customers, developing a network of warehouses, selecting carriers to get products to customers, and setting up an invoicing system.
Returning: Receiving defective and excess products from customers and addressing customer queries.

Supply chain disruptions can pose a major threat to business operations.
Risk management involves identifying these risks and coming up with strategies to mitigate them.
Strategies may include diversifying supply sources, boosting stock levels and implementing a robust business continuity plan.

Supply chain efficiency is about cost minimisation and streamlining operations to ensure maximum productivity.
Supply chain responsiveness is about being flexible and adapt to unforeseen changes in demand or supply patterns.
The right balance between the two is crucial, depending on the business model and the nature of the demand for the products.