What’s a supply chain?
Investopedia* defines a supply chain as “the network created amongst different companies producing, handling and/or distributing a specific product. Specifically, the supply chain encompasses the steps it takes to get a good or service from the supplier to the customer.”
Supply chains can be very simple and others can be highly complex networks. When the NUMMI auto plant in Fremont, CA closed in 2010, it was estimated that about 1,200 suppliers and service providers would directly or indirectly be affected (from the August 27, 2009 edition of the Contra Costa Times).
And why do I need one?
If you have customers and products (physical or digital) and revenue, then you already have a supply chain, but you may know it by some of its component names. For example, order processing, distribution and customer service are elements in a supply chain. Manufacturing, inventory management and warehouse management are also elements in a supply chain. Ecommerce and digital delivery are also elements of a supply chain for companies that don’t make stuff in a box.
How do I know if my supply chain is any good?
Having a clear understanding of your customers’ expectations with regard to price, quality, and performance, while at the same time delivering on those expectations proves that your small business supply chain works.
But does it work as well as it could? Could something be done to decrease costs, increase speed, and improve overall efficiencies without sacrificing quality, performance and customer satisfaction?
It’s quite the juggling effort and one that could be helped with an independent process review. A process review would look at, among other elements, your supplier performance and pricing in relation to comparable suppliers. It would look at purchasing practices and inventory management and their impact on your ability to deliver on time and under budget. All aspects of your supply chain would be considered in any recommendations for change.