If you’ve ever wondered “what is supply chain?”, you’re not alone. It’s a question often posed to supply chain consultants, and the answer is multi-faceted, encompassing a wide range of subcategories. At its core, supply chain management aims to efficiently manage the flow of goods, services, and information from the point of origin to the point of consumption, ensuring products reach customers effectively and economically. Far from a simple concept, supply chain involves numerous interconnected disciplines that work together to bring products from their raw materials to the hands of the customer.
The 12 Key Disciplines of Supply Chain
While the supply chain can be vast and intricate, with more than 12 categories, a good starting point is to understand the 12 core disciplines:
- Procurement & Strategic Sourcing: This discipline focuses on acquiring the necessary raw materials and components, often involving considerations beyond just cost, such as storage and transportation.
- Logistics: This involves the detailed organization and implementation of a complex operation, ensuring products move efficiently through the supply chain.
- Inventory Management: This discipline deals with the tracking and control of goods through the supply chain, from raw materials to finished products.
- Demand Planning & Forecasting: This involves predicting future customer demand to ensure appropriate levels of inventory and production.
- Production Planning & Operations Management: This discipline focuses on organizing and managing the processes involved in creating goods and services.
- Supply Planning: This involves determining how to best meet the forecasted demand, considering available resources and production capabilities.
- Order Fulfillment & Customer Service: This discipline encompasses all the steps from receiving an order to delivering the product to the customer and ensuring their satisfaction.
- Supply Chain Strategy & Network Design: This involves designing the overall structure of the supply chain, including the location of facilities and the flow of goods.
- Sustainability & Circular Supply Chain: This increasingly important area focuses on minimizing environmental impact and promoting resource efficiency throughout the supply chain.
- Technology & Automation: This discipline involves leveraging technology and automation to optimize various supply chain processes, from warehousing to transportation.
- Risk Management & Resilience: This focuses on identifying and mitigating potential disruptions to the supply chain, ensuring its ability to withstand challenges.
- Compliance, Trade, & Customs: This discipline ensures adherence to all relevant regulations, trade agreements, and customs procedures.
The Importance of Communication in Supply Chain
Effective communication is crucial for a seamless and efficient supply chain. For example, there can often be tension between procurement and operations; while procurement seeks the best price, operations must consider the cost of carrying, warehousing, and transporting the product. Understanding the end-to-end business flows and how each discipline interacts is vital. As we often say, an IT project isn’t just an IT project; it’s an operations project that involves everyone from procurement to transportation.
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