A raw materials. In the secondary sector the production

A supply chain is a link between a business and its
suppliers to produce and distribute a specific product.  In the supply chain the business tend to
reduce cost, this overtakes the business competitors. Also distribute quality
products with flexible delivery that suits both business. In the supply chain
there a many stages. The sectors that the supply chain operate in are primary,
secondary and tertiary. In the primary sector the production is raw materials.
In the secondary sector the production is manufacturing and assembly. In the
tertiary sector this is where the distribution takes place. There are five
stages within the SCM which will appear in the image below.

 

There are many objectives of supply chain management,
one of the objectives of the SCM is to build a strong relationship with all
their partners. They want to build this relationship by producing products fast
and get them to the partner as soon as possible. They must be consistent
otherwise their partner will leave as the customer won’t be satisfied. They
need to be consistent by selling products faster, so they benefit and their
partner benefits. For example, selling online.

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Push

There are two strategies that work within the supply
chain, which are pull and push strategies. Under the pull supply chain the
process is pushed by customer demand. The push supply chain is driven by
long-term projections of customer demand. These two strategies have positive
and negative.

One positive impact of the pull strategy on the SCM is
that there would be less production as the will only make products based on
demand and orders. This would benefit the SCM as they would be saving money.
Also if they’re making less products this means they will be able to manage
their stock easily. If this happens the SCM management are reaching their
objective. A negative would be it takes time to make a product for a specific
customer, the reason it’s a negative is because pull strategy is supposed to be
a fast process.

The positive impact of the push strategy on the SCM is
that if the forecasting is accurate they will benefit positively. They will be
able to sell products to customers rapidly, this means they will meet their
goal and make money. They would also be meeting customer needs. If the forecast prediction is wrong this will have a
negative impact on the SCM. This is because they would be making too much
products, this leads to less profit. For example if walkers made to much crisp
and they don’t sell, the potato would become out of date. This impacts the SCM
as they will not be meeting their goals.

Bottleneck

A bottleneck is when there are too much
products in a production system that happens when workloads arrive too quickly
for the production process to handle. Due to this this causes delays and higher
production costs.  Bottleneck has a
significant impact on the stream of manufacturing costs, and the bottleneck can
heavily increase the time and cost of production. This could impact
organisations as they would have to wait longer than they expected for their
products. This will affect the flow of customers, which results in less profit.

Bullwhip effect

Bullwhip effect is where a product gets an
unexpected increase in sales and business starts asking their suppliers for
more stock so they can meet customer demand. This is where SCM of the product
start to make more products so they can meet the demand for the product. There
are positives and negatives to the bullwhip effect. An example of a product
that experienced the bullwhip effect is fidget spinners. When the fidget
spinners first came in there was a sudden trend which increased demand
drastically for this product. This is a positive impact on the SCM as they will
be able to make money easily as the product would sell quickly. However the
trend of fidget spinners only lasted for a couple of weeks, this had a negative
effect on the SCM as they mad too much of this product and lost out. If there
was still a trend the product would’ve sold quickly. This is a factor SCM needs
to consider.

Downstream/ upstream

The upstream stage in the supply chain involves searching for and
extracting raw materials. The upstream part of the supply chain process does
not do anything with the material itself, such as processing the material. This
part of the process simply finds and extracts the raw material. However the
downstream stage in the supply chain consist of processing the material from
the upstream into a finished product. For example when Apple make the IPhone in
China. But the product can’t be made without the upstream part in the supply
chain as they would need the materials, this is where the downstream comes in.

Centralized and decentralized

There are two
different types of distribution models that are in the supply chain management,
which are centralized and decentralized. Centralized distribution is the structure
of distributing goods to retail stores in a chain, from a central or local
warehouse, so staying away from direct distribution. Decentralized distribution
is a system that requires multiple
parties to make their own independent decisions. There are advantages
for both models on how they support SCM. The advantages for a centralized
distribution is that low safety stock levels. This supports the SCM as they
would be saving money as they would be paying less utility bills and making
less rent payments. This means they would reducing costs. Reducing cost leads
to saving money. This means they’re meeting their objectives. It also supports
SCM as they do not have to spend much on maintain their stock as they have a
low amount. The advantages for a decentralized distribution is that there is
low transportation cost and low lead times. This supports the SCM in many ways,
one of the ways it supports is by saving them money as they don’t have to spend
much on transportation, whereas with a centralized distribution you do. They
can then use the saved money on making thing better.

 

Downstream/ upstream

The upstream stage in the supply chain involves searching for and
extracting raw materials. The upstream part of the supply chain process does
not do anything with the material itself, such as processing the material. This
part of the process simply finds and extracts the raw material. However the
downstream stage in the supply chain consist of processing the material from
the upstream into a finished product. For example when Apple make the IPhone in
China. But the product can’t be made without the upstream part in the supply
chain as they would need the materials, this is where the downstream comes in. 

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