Manufacturing Chain: Supply Chain in Manufacturing Industry

Posted 1 year ago by Max Komonov

There is听a听lot that goes into starting and听running a听physical products business. One of听the听most critical parts is听ensuring items stay in听stock. After all, having to听tell customers that items are out of听stock or听giving them delivery dates far off in听the听future can easily cause them to听turn elsewhere.

Fortunately, it听is听possible to听ensure items remain stocked, with a听key part being the听manufacturing chain. Let鈥檚 take a听closer look at听the听definition of听a听manufacturing chain and听what it听entails.

What is听a听Manufacturing Supply Chain?

础听manufacturing supply chain is听a听series of听tasks and听processes that take raw materials and听turn them into a听final product sold by听a听business. This includes steps like collecting material procurement, processing those materials, production, quality assurance lines, logistics, distribution, and听follow-up service.

The manufacturing supply chain is听the听lifeblood of听any听retail or听ecommerce business. After all, you can鈥檛 make sales without a听finished product, which is听the听result of听a听well-running supply chain.

Supply Chain in听the听Manufacturing Industry: 5听Steps

Now that we鈥檝e discussed the听general meaning of听a听supply chain in听the听manufacturing industry, let鈥檚 look at听the听details of听each step involved in听the听chain.

Step 1.听Material Procurement

The first step of听any听manufacturing and听supply chain is听the听procurement of听raw materials to听create a听product. For example, cotton is听procured to听make T-shirts, and听steel is听procured to听create mechanical parts, like in听an听automotive manufacturing supply chain.

Step 2.听Processing

Once those raw materials have been secured, some may need to听be听processed to听become usable. This may involve chemical, thermal, and听mechanical operations to听transform the听materials into components that can be听used in听the听assembly of听the听final product.

Step 3.听Production

Once raw materials have been processed, they can then begin the听production process, which means turning those materials into the听final product. This is听likely the听step that comes to听mind for听most people when referring to听manufacturing. Production is听one of听the听most significant parts of听the听supply chain, and听it听is听often where many inefficiencies or听costs can be听improved and听optimized.

Step 4.听Logistics

After production is听complete, then comes logistics. Logistics involves the听transport, shipping, and听storing of听the听finished products. For the听business selling the听products, this can include choosing carriers and听arranging for听transportation of听the听finished product to听a听warehouse or听store. Storage and听warehousing can be听a听section of听the听supply chain in听its own right, as听there are several details to听consider.

Moreover, some businesses may have their own warehouse or听onsite storage to听keep products, whereas others may need to听store them in听a听third-party warehouse, which incurs costs. Whichever option a听business uses, it鈥檚 essential to听ensure that products will be听able to听move efficiently for听customers to听receive their orders on听time.

Step 5.听Distribution

Distribution is听also part of听the听logistics process. This means that once the听product has arrived at听the听warehouse or听store, it听needs to听be听shipped and听delivered to听the听customer. Distribution is听a听vital step in听the听supply chain, as听it听can be听the听difference in听the听timeliness that customers receive their products. Slow distribution can easily lead to听dissatisfied customers who don鈥檛 come back to听buy again.

Supply Chain Model Types

There are a听few different models of听supply chain operations. The right model can depend on听the听particular type of听business and听their operational structure.

Fast chain model: The fast chain model is听most fitting for听businesses that rely on听following the听latest trends. They need their products to听fly through the听manufacturing supply chain process to听get them to听market as听fast as听possible. Fast fashion is听a听good example of听an听industry that uses this type of听supply chain.
Flexible model: 础听flexible model is听ideal for听companies mainly selling seasonal products. In听other words, they will have heavy production periods with long lulls in听between. They require a听supply chain that can quickly ramp up听to听meet the听production needs of听busy seasons and听slow down when the听off-season comes.
Continuous flow model: The continuous flow model is听the听traditional supply chain model for听many companies. However, it听works best for听those who create products with little variation. It听simply means that production will be听regularly operating to听ensure a听continuous flow of听products from manufacturing to听the听business for听them to听sell. This model typically only works well when there is听a听high demand for听the听products to听ensure they will also continuously sell.

The Importance of听Manufacturing Supply Chain Optimization

础听well-running manufacturing supply chain is听key to听successful business operations. Inefficiencies, slowdowns, or听errors can easily lead to听lost time, money, and听effort. There are several steps in听the听supply chain process where inefficiencies can occur that will lead to听disaster for听a听business.

That鈥檚 why it听is听so听vital for听businesses of听all types to听look for听areas across the听supply chain where they can optimize. Here are some best practices for听supply chain optimization.

Maintain Strong Communication

One of听the听easiest ways for听a听business to听optimize its supply chain is听by听maintaining regular communication throughout the听process. This includes developing a听strong relationship with suppliers, logistics services, and听distribution facilities. When there is听any听stop or听slowdown, businesses can reach out to听the听specific area of听the听issue.

Transparency Across the听Supply Chain

Far too many businesses view their supply chain as听an听out-of-sight, out-of-mind situation. In听other words, they don鈥檛 have control over what they don鈥檛 see. Yet, every business should try to听maintain transparency over each point of听the听supply chain to听the听best of听their ability.

This means tracking production times, staying on听top of听potential delays or听difficulties, and听tracking distribution efforts. For those with the听resources, this can be听monitored down to听the听finest details through automated sensors or听tracking tags across shipments.

Optimize Pricing

The supply chain can easily become riddled with overages and听increased costs when not monitored properly. For instance, just the听process of听finding a听supplier for听the听manufacturing of听the听products can be听more expensive than necessary. Sometimes, this can be听solved by听renegotiating with the听supplier or听potentially finding a听new supplier.

Regular Analysis

Businesses should never just settle on听their supply chain with no听further review. Instead, they should conduct a听regular audit and听. This includes auditing everything from the听initial manufacturer to听the听delivery of听the听product to听the听customer. Operations change every day, and听it听may be听that a听better warehouse or听a听more optimal distribution method is听found simply from a听quick review.

Inventory Management

Adequate inventory management is听often an听area where many businesses can optimize their supply chain. Far too many businesses tend to听order excess inventory, which can lead to听additional storage costs incurred over time. Accurate inventory forecasting can help businesses ensure they have the听necessary amount of听products on听hand to听deliver to听customers without going overboard.

There are numerous methods of听forecasting and, ultimately, it听comes down to听what works for听the听business. Some may prefer to听do听their calculations manually based on听general velocity, whereas others may opt for听a听modern tech solution like AI听to听forecast for听them.

Technology

Modern technology has made it听easier than ever to听optimize the听supply chain and听yet, many businesses still aren鈥檛 embracing it听enough. 础听good example of听this is听AI, as听mentioned above. AI听is听becoming a听valuable technology for听many businesses to听develop a听resilient supply chain.

In听fact, AI听can easily help analyze data, identify patterns, and听even make predictions of听disruptions or听short stock. There will be听initial costs to听implementing new technology, but in听the听long run, it听can improve efficiency, visibility, customer satisfaction, and听competitive advantage.

Manufacturing Supply Chains: The Key to听Success for听Any Business

Understanding the听supply chain is听critical for听a听business to听succeed and听improve over time. In听fact, optimal manufacturing planning and听control for听supply chain management can be听one of听the听best ways for听a听business to听improve its operations very rapidly.

Not only will it听help them mitigate costs, but it听can also lead to听increased revenue as听sales and听velocity improve. The supply chain consists of听several different points outside of听the听end-point business, but this doesn鈥檛 mean they have no听control over those other points.

At听the听end of听the听day, an听optimal supply chain can make or听break a听business, allowing it听to听succeed in听a听sea of听competition. By听understanding the听components of听the听supply chain as听well as听using the听optimization points above, a听business can achieve heights they never thought possible.

We听hope this article helps you gain more understanding of听your own supply chain and听make improvements where necessary. Don鈥檛 forget to听check out to听grow and听improve your overall business!

听

About The Author

Max has been working in the ecommerce industry for the last six years helping brands to establish and level-up content marketing and SEO. Despite that, he has experience with entrepreneurship. He is a fiction writer in his free time.

51视频