A product that wants to reach you must go through many different stages. The journey will first start from raw material suppliers, followed by factories and workshops, then continue to be transported to dealers, retail stores and finally to you.

A series of activities above are located in a closely related system called supply chain. Perhaps we have all heard this phrase before. However, today, Ms. Uptalent will help readers learn more about the concept, role, characteristics and common types of supply chains through this article.

The content of the article includes:
1- What is a supply chain?
2- The role of the supply chain
3- Characteristics of the supply chain
4- Popular Supply Chain Models
4.1- Continuous flow model
4.2- Agile model
4.3- Agile supply chain model
4.4- Flexible model
4.5- Models with personalized configurations
4.6- Effective model

See more >>>> Job offers in Supply Chain

1- What is a supply chain?

According to the Association of Supply Chain Management Professionals, good supply chains supply chain is defined as follows:

“A supply chain is a system of organizations, people, activities, information and resources involved in moving products or services from suppliers or manufacturers to consumers. »

“A supply chain is a system of organizations, people, activities, information and resources involved in moving products or services from suppliers or manufacturers to consumers. »

Many people often confuse supply chain and logistics. Although these two concepts have many similarities, they are actually completely different. If it is not clearly defined, it will be difficult for managers to manage the supply chain effectively.

To put it simply, supply chain has a broader scope and logistics is an element of supply chain. So when it comes to supply chain management, we can understand that it includes logistics management.

2- The role of the supply chain

The business environment is increasingly competitive. Therefore, to survive and grow, companies must pay attention to the business activities of their suppliers and customers. This means that companies need to pay more attention to the movement of raw materials, product manufacturing activities, transportation, storage, packaging of goods, etc. Meanwhile, all of these activities are linked together throughout the supply chain.

Amid increasingly tight market selling and purchasing prices for goods, companies with strong supply chains will enjoy an increased competitive advantage. So, 90% of CEOs worldwide attach importance to supply chain management.

Companies with large and influential supply chains will become dominant in the market and gain customer trust. Through this, shareholder value increases, business strategies are expanded and the business also expands further.

Furthermore, the supply chain is also a factor that determines the competitiveness of a company compared to its competitors. Reality has shown that through efficient supply chains, large companies such as Dell and Wal-Mart earn 4-6% higher profits than other companies in the industry. However, the world’s largest companies such as Apple, Samsung and Coke have increased their value by more than 40% compared to their competitors thanks to effective supply chain management.

In addition, independent study results also show that effective supply chain management can reduce chain costs by 25-50%, inventory levels by 25-60%, and forecast accuracy. products. Exports increased by 25-80%, order supply cycle increased. by 30 to 50% and profit after tax increased by 20%.

From the above, we can see the important role of supply chain in business development. However, the more important question is how to effectively manage the supply chain to generate optimal profits for the company.

3- Characteristics of the supply chain

An effective supply chain should have the following characteristics:

The first one, consistent with the strategy and commercial objectives of each company. A supply chain is considered effective when it can be linked to the company’s development strategy at each specific stage. At the same time, the supply chain must also be adapted to the specific characteristics of the company, including: market, assets and other resources.

Monday, depending on customer needs. With an efficient supply chain, your business can produce the right products for each market segment. In addition to ensuring timely delivery of goods to customers.

Tuesday, consistent with the company’s position in the market. Regardless of your company’s position in the market, whether your brand is strong or weak, whether it is large or small, it has its own choice of suppliers and target customers.

Wednesday, adapt quickly to changes. Supply chains operate based on the exchange of information between stakeholders. Therefore, good supply chain management will help you quickly understand market and competitor changes in order to make timely decisions.

4- Popular Supply Chain Models

There are currently 6 popular supply chain models, including:

4.1- Continuous flow model

This is one of the traditional supply chain models. This model works based on the stability of supply and demand. Its processes are programmed to ensure the continuity of information and product flows. This model is therefore only suitable for old industries with a certain stability. The effect of the model is to provide stability in very demanding situations. Companies that produce the same product multiple times and have less variable customer demand profiles are best suited to this model.

4.2- Agile model

This type of supply chain is best suited to industries where customer demand is unpredictable and products are made to order. Agile focuses on the ability to increase production at any given time while remaining “static” when demand is low.

4.3- Agile supply chain model

This model is particularly suitable for industries that produce trendy products with a short life cycle, such as clothing. As a result, companies need to get their products to market before the trend stops. The value of companies in this industry is assessed based on how quickly and efficiently they update the latest trends. Applying this procurement model will give businesses some flexibility.

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4.4- Flexible model

This model is suitable for businesses in industries that do not have unexpected demand or have relatively predictable peaks in demand and have long production periods with little workload. Typically, companies produce seasonal or holiday products. Businesses that adopt an agile model will have enough “freedom” to respond to high volumes of demand and manage low workloads over long periods of time. Production can be started and stopped easily.

4.5- Models with personalized configurations

Often applied in automobile manufacturing companies. This model offers custom configurations for assembly and production processes. It is a combination of agile model and continuous flow model.

4.6- Effective model

This model is suitable for businesses operating in a highly competitive market where price plays an important role. To achieve maximum business efficiency, companies must maximize the use of machinery and other assets at their disposal to achieve high equipment efficiency and reduce costs. At the same time, inventory management and order fulfillment are key tasks that help ensure business profits.

Through this article, Ms. Uptalent shared the most important information about the supply chain with readers. I hope that from the information shared by Uptalent, you will have a clear understanding of what a supply chain is and the role and characteristics of an effective supply chain. Consider following Uptalent to discover other interesting career information!

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