The Importance of Supply Chain Management

By the time you turn on your oven for the first time, drive your new car off the lot, or even bite into a sandwich at a café, everything you touch has gone through a supply chain with many moving parts. Supply chain management is vital to ensuring that the consumer gets a product on time and in good condition.

Manufacturing

The end manufacturer isn’t even the first stage of getting a product to a consumer. An engineered products company has to make knobs, rivets, and hinges. A rubber molding company has to create hoses, belts, and tires. It is important to have reliable subcontracting companies who can meet deadlines and provide you with quality goods on time.

Transportation

Sometimes manufacturing takes part in multiple cities or countries. A part may be manufactured in Kentucky, then shipped to Mexico to be put into an engine, then shipped back to the United States for the final assembly. Some companies use computer algorithms to establish the most cost- and time-effective ways of moving goods from one place to another.

Labor

Labor shortages can affect the entire supply chain, whether that comes from a shortage in production output due to a missing employee or a delay in shipping thanks to a lack of available truck drivers. Even having too few cafeteria employees for the on-site lunch can add extra minutes multiplied across thousands of people. Adequate staffing is vital to production and distribution, so some companies turn to staffing agencies to temporarily fill gaps.

The supply chain is a complicated beast with many places where things can go wrong. Sometimes vertical integration can help smooth out these issues, but other times you just need to be aware of the potential delays further up the chain so you can better prepare your staff and your consumers with realistic expectations.