Basics of a Supply Chain

Name: Basics of a Supply Chain
Author: Michael D. Ford

Learn the fundamentals of a supply chain

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Course: On-Demand

The world is no longer a business to business competition such as Company A versus Company B. Instead, Company A's supply chain competes with Company B's supply chain. A supply chain consists of nodes and flows. A node is any business entity in the supply chain such as the supplier, manufacturer, and customer. These three nodes make up the bare minimum of supply chain. If we extended that supply chain, we would see what are called intermediate nodes between the manufacturer and customer. These can be a distributor, wholesaler, and retailer. When we consider the fact that many products consist of many different subassemblies or components, it is possible to have many more nodes in an end-to-end supply chain. For example, in the automotive industry, iron ore is mined then sand blasted to become pig iron. Pig iron is forged to become steel. The steel may be shaped into coils. The coils may be cut into sheet metal. The sheet metal may be fabricated into a car body. The car body goes into final assembly of a vehicle. Finally, the vehicle is delivered to a dealership where you, the consumer, will purchase it. It is important to note that every node also has suppliers and customers. And the node itself is a supplier to its downstream customers, and simultaneously a customer to its upstream suppliers. Every supply chain for any product has the same starting point. Every supply chain also has the same ending point. Do you know what it is? The starting point and ending point are one in the same, planet earth. Everything starts with something that is mined or harvested. And ultimately, everything is disposed of. Recognizing this fact gives us an appreciation for conserving resources and the importance of sustainability efforts. There are four primary flows in a supply chain. A flow is a unidirectional or bidirectional movement of an item through the chain. We most commonly consider the downstream flow of materials. For example, manufacturer to distributor, to retailer to consumer. This is the first primary flow. Another way of looking at this is a product moves from seller to buyer. This suggests a financial implication. We need to pay for the product. The second primary flow is the upstream movement of funds, which can be via cash, check, credit card, or an electronic funds transfer. The third primary flow involves information, which goes both upstream and downstream. Information about demand flows upstream as customers place orders for a given quantity of a specific product by a requested due date. Another example of demand could be customers providing forecasts in anticipation of future requirements, predicting future orders. Information also flows downstream from suppliers to customers. Examples of downstream supply information include what products are available, packaging size, the expected lead time, and the pricing. The fourth primary flow is known as reverse logistics, which can include repairs, returns and recyclables. The reverse supply chain was once considered only as an afterthought as anything sent back upstream was handled on an as needed basis. The best companies now recognize reverse logistics upfront, and design both the forward and reverse supply chain simultaneously. Reverse logistics has become part of strategy as opposed to a reactionary tactic.

Beginner Provider : Michael D. Ford 3 Lessons · 8m in Arabic, German, English, Spanish, French, Portuguese, Chinese

Course Description

In today's world, competition isn't so much of business versus business, as it is supply chain versus supply chain. This module will provide you with the basics of what is involved with a supply chain. You will learn how nodes and flows make up the minimum of a supply chain, as well as the three primary objectives it needs to fulfill to be successful.

What You'll Learn

Understand the difference between nodes and flows in a supply chain
Differentiate between the four primary flows of supply chains
Differentiate the three primary objectives of supply chains
Identify the supply chain elements that make up the minimum of a supply chain
Test your knowledge of supply chain basics through the course assessment

Key Takeaways

A supply chain is made up at minimum of nodes and flows.
Supply chains have four primary flows that can be differentiated from one another.
A supply chain has three primary objectives it needs to fulfill to be successful.
In today's competition, it is often supply chain versus supply chain rather than business versus business.

Frequently Asked Questions

What does this course cover?

This module provides the basics of what is involved with a supply chain, including how nodes and flows make up the minimum of a supply chain and the three primary objectives a supply chain needs to fulfill to be successful.

What will I be able to do after completing this course?

You will be able to understand the difference between nodes and flows, differentiate between the four primary flows of supply chains, and differentiate the three primary objectives of supply chains.

What lessons are included in this course?

The course includes Supply Chain Elements, Supply Chain Objectives, and a Test Your Knowledge assessment.

What skills does this course help develop?

It supports skills in Supply Chain, Supply Chain Analysis, Supply Chain Management, Supply Chain Integration, Supply Chain Network, and Supply Management.