WHAT IS SUPPLY CHAIN MANAGEMENT ? 5 MINUTES EXPLANATION !!
Summary
TLDRThis video offers a concise introduction to supply chain management, explaining its key components and flows. It uses the example of a milk supply chain to illustrate the journey from raw materials to end customers. The video identifies five main participants: suppliers, producers, distributors, retailers, and customers. It outlines three major flows: product, information, and financial. Lastly, it defines supply chain management as overseeing the entire manufacturing and delivery process, touching on processes like manufacturing, warehousing, strategic planning, demand forecasting, and transportation.
Takeaways
- 🌐 A supply chain is a global network that coordinates the production and distribution of goods and services from raw materials to end customers.
- 🚚 The supply chain involves three key flows: product flow, information flow, and financial flow, which are essential for its operation.
- 🛒 Key participants in a supply chain include suppliers, producers, distributors, retailers, and customers, each playing a specific role in the process.
- 🏭 Producers, also known as manufacturers or service providers, transform raw materials into finished goods or services.
- 📦 Distributors purchase products in bulk from producers and sell them to customers in larger quantities than individual consumers would buy.
- 🏬 Retailers sell products in smaller quantities directly to end customers, fulfilling their immediate needs.
- 💼 Supply chain management encompasses the entire process of manufacturing a product or service, from raw materials to delivery to the customer.
- 🔍 Strategic planning, demand forecasting, and supply planning are crucial processes within supply chain management for efficient operations.
- 📈 Information flow is bi-directional and includes data such as product specifications, inventory levels, and order details, acting as the 'fuel' for the supply chain.
- 💵 Financial flow involves the movement of funds from the end customer back through the supply chain, with the final consumer being the primary source of revenue.
- 📝 Supply chain management also involves processes like order fulfillment, procurement, and transportation planning to ensure product distribution and delivery.
Q & A
What is the definition of a supply chain?
-A supply chain is a global network that produces and distributes goods and services from raw materials to end customers via information flows, product flows, and financial flows. It is a multi-level system that generally crosses the boundaries of several companies to coordinate the related flows.
Can you provide a simple example of a supply chain?
-A simple example of a supply chain is the milk supply chain, where milk goes from dairy farms to storage in a warehouse, then to processing in a manufacturing facility, followed by storage in distribution centers, and finally transported to retailers like supermarkets for customers to purchase.
What are the five key participants in every supply chain?
-The five key participants in every supply chain are suppliers, producers, distributors, retailers, and customers. Suppliers provide raw materials or services, producers manufacture goods or services, distributors deliver products in bulk to customers, retailers sell products in smaller quantities to individual customers, and customers are the end-users of the products or services.
What is the role of a supplier in the supply chain?
-A supplier is a person or a company that sells a product or service to another entity, providing raw materials, components for assembly, energy, and so on. They are the starting point in the supply chain, ensuring that the necessary materials are available for production.
What does the term 'producer' refer to in the context of supply chains?
-In the context of supply chains, a producer, also known as a manufacturer or service provider, is a business that manufactures goods or services. They process raw materials and produce finished goods, which may also include assembling products using components called sub-assemblies provided by suppliers.
What is the function of distributors in the supply chain?
-Distributors, also known as wholesalers, buy inventory in bulk from producers and deliver it to customers in a bundle of related product lines. They typically sell to other businesses and in larger quantities than individual consumers would purchase.
How do retailers contribute to the supply chain?
-Retailers keep goods on hand and sell in smaller quantities to customers. They offer products and services to fulfill the needs of individual customers who purchase in small quantities, acting as the final point of sale before the product reaches the end consumer.
What are the three major supply chain flows?
-The three major supply chain flows are product flow, information flow, and financial flow. Product flow is the movement of goods from the supplier to the customer. Information flow involves data such as bills of materials, product data, inventory data, and order details. Financial flow refers to the movement of funds from the end customer back through the supply chain.
What is supply chain management and what processes does it involve?
-Supply chain management refers to the management of a product or service's entire manufacturing flow from raw materials to the delivery of the finished product to the customer. It involves processes such as manufacturing, warehousing, strategic planning, demand planning, supply planning, order fulfillment, procurement, and transportation planning.
Why is information flow considered crucial in supply chain management?
-Information flow is considered crucial in supply chain management because it involves data such as product specifications, inventory data, and order details, which are essential for coordinating the supply chain activities. It is bi-directional and acts as the 'fuel' that drives the supply chain, ensuring that all participants have the necessary information to make informed decisions.
How does financial flow work within the supply chain?
-Financial flow in the supply chain involves the movement of funds from the end customer, who is usually the only source of real money in the network, back down the chain. This flow of funds or revenues passes through the supply chain's various links, from the final consumer to the suppliers, ensuring that all parties are compensated for their contributions.
Outlines
🚚 Introduction to Supply Chain Basics
This paragraph introduces the concept of supply chain management, explaining it as a global network that coordinates the production and distribution of goods and services from raw materials to end customers. It uses the example of a milk supply chain to illustrate the journey a product takes from dairy farms to the supermarket. The paragraph identifies five key participants in a supply chain: suppliers, producers, distributors, retailers, and customers. It also outlines the three major supply chain flows: product flow, information flow, and financial flow, emphasizing their importance in the supply chain ecosystem.
📈 Understanding Supply Chain Management Processes
The second paragraph delves into the processes involved in supply chain management, which includes manufacturing, warehousing, strategic planning, demand planning, supply planning, order fulfillment, procurement, and transportation planning. It highlights the importance of these processes in ensuring the efficient flow of products from raw materials to the end customer. The paragraph concludes with a call to action for viewers to subscribe for more information on the supply chain and to check out other videos for further understanding of logistics.
Mindmap
Keywords
💡Supply Chain
💡Supply Chain Management (SCM)
💡Product Flow
💡Information Flow
💡Financial Flow
💡Suppliers
💡Producers
💡Distributors
💡Retailers
💡Customers
💡Strategic Planning
Highlights
Supply chain is a global network that coordinates the production and distribution of goods and services.
Supply chain involves information flows, product flows, and financial flows.
Key participants in a supply chain include suppliers, producers, distributors, retailers, and customers.
Suppliers provide raw materials, components, or services to the supply chain.
Producers or manufacturers convert raw materials into finished goods.
Distributors or wholesalers buy in bulk and sell to businesses in larger quantities.
Retailers sell goods in smaller quantities directly to end customers.
Customers are individuals or organizations that purchase and use products or services.
Product flow is the movement of goods from suppliers to customers.
Information flow includes data such as bills of materials, product data, and inventory information.
Financial flow involves the movement of funds from the customer back to suppliers.
Supply chain management oversees the entire manufacturing flow from raw materials to customer delivery.
Key supply chain processes include manufacturing, warehousing, strategic planning, demand planning, and supply planning.
Order fulfillment involves sales order processing and billing.
Procurement is about purchase order processing, received confirmation, and invoice verification.
Transportation planning and execution are crucial for the distribution of products.
Supply chain management is essential for coordinating related flows across multiple companies.
Transcripts
welcome to this video of logistics and supply chain basics in this video you will learn about
supply chain management in five minutes we will see what is the supply chain key
components and flows of the supply chain and what is supply chain management so let's get started
first what is a supply chain let's take a look at this very simple example of a milk supply chain
as a customer you go maybe every day to purchase milk or yogurt from a supermarket
actually for this milk to be available at the right time and right place for you it goes
through a long journey it goes from dairy farms to storing the milk in a warehouse then processing
in a manufacturing facility then to storage in multiple distribution centers then transported
to retailers like supermarkets to be bought by you and other customers so a supply chain is a
global network that produces and distributes goods and services from raw materials to end customers
via information flaws product flows and financial flows it is a multi-level system that generally
crosses the boundaries of several companies to coordinate the related flows we have five key
participants in every supply chain one suppliers a supplier is a person or a company that sells
a product or a service to another entity the supplier can provide raw materials components
for assembly energy and so on some examples can be provided meat electronic components
plastic and so forth two producers producers also known as manufacturers or service providers
are businesses that manufacture goods or services companies that process raw materials as well as
companies that produce finished goods fall under this category besides producers of finished goods
assemble their products using components called sub assemblies that are provided by suppliers
examples can be producing necklace from gold flour from wet phone from different components
and so on three distributors distributors also known as wholesalers are companies that buy
inventory in bulk from producers and deliver it to customers in a bundle of related product lines
they usually sell to another businesses and in larger quantities than an individual consumer
would generally purchase examples can be distributing pens to small shops
4. retailers retailers keep goods on hand and sell in smaller quantities to customers
retailers offer products and services to fulfill the needs of individual customers who purchase in
small quantities and finally customers individuals or organizations who buy and use a product or
service are known as customers customers rely on producers distributors and retailers to fulfill
their product and service requirements so for the examples we mentioned previously the customer is
the one going to be eating mean based products buying and using the phone and so on now the
major supply chain flows are the following first we have the product flow which is the movement
of goods from the supplier to the customer it is like the lifeblood of the supply chain
second the information flows so bills of materials product data specifications and pricing
inventory data customer and order details delivery scheduling supplier and distributor documentation
designation of goods and services are all elements involved in what we call
information flows in a supply chain supply chain management involves a lot of data sources
the information flows are bi-directional and are considered as the fuel for the supply chain
third the financial flow there will be a flow of funds in the supply chain from the end customer
of the product back down the chain financial funds or revenues flow back through the supply
chains other links from the final consumer who is usually the only source of real money
in the network the question now is what is supply chain management supply chain management refers
to the management of a product or services entire manufacturing flow from raw materials to delivery
of the finished product to the customer the main supply chain processes are manufacturing which is
about planning scheduling and executing production warehousing that includes storage of physical
inventory in different facilities strategic planning that defines strategic supply chain
design and strategic sourcing of materials demand planning that involves predicting demand based on
historical data for example and supply planning that involves for example calculating quantities
to be delivered to each location to meet customer demand order fulfillment that involves sales order
processing and billing business process procurement that is about purchase order
processing received confirmation and invoice verification and finally transportation planning
and execution and costing processes related to the distribution of products this was a quick
explanation of what is supply chain management if you want to know more about each process of
the supply chain make sure to subscribe to get notified on my upcoming videos if you want to
know about logistics meaning check out my video that explains logistics in less than 3 minutes
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