What is a business supply chain? What is it’s purpose?
These questions are important, but perhaps the most important is: “How does a supply chain affect me?” To start with, a supply chain for a product is the process of how a good or service starts in it’s earliest form and reaches the end consumer. For goods, the beginning of a supply chain usually starts with raw materials. Think of an air conditioner for example. Raw material inputs might include aluminum, steel, copper, plastic, fiberglass and others. Carrier, a well-known air conditioner manufacturer, has manufacturing locations in Indiana, Tennessee, Texas, Mexico, and North Carolina.
In order to get the raw materials to the manufacturing plants, Carrier must have a well functioning transportation system set up. From here, the manufacturing plant builds the air conditioners. They need to have an efficient operations strategy to ensure the products are built quickly and with quality. Once leaving the manufacturing plant, Carrier must have another transportation system set up, so that the products can reach the distributors. Mingledorff’s Inc. is a regional distribution center that deals Carrier equipment. Their purpose is to inventory and provide finished HVAC products to retailers.
My family business, Speir Heating and Air Inc. is a retailer based in Warner Robins, Georgia. We buy directly from the Mingledorff’s Warner Robins store. At Speir, we rely on Mingledorff’s to provide us with the products we need in order to make our customers happy. If there is a problem and Mingledorff’s doesn’t have the products we need on time, not only do we suffer, our customers do too. Especially when it is over 100 degrees outside.
Supply chains are extremely important to the happiness of consumers, yet most people do not understand the processes that go on behind the scenes. I have provided one example of a supply chain, but the fact is that nearly every product you use on a daily basis has a supply chain. The challenge for companies deals with integrating the existing links of the chain. They often have to answer the question, “How can we improve the processes we have in place?” Some ways in which firms are dealing with this problem include: demand forecasting, integrated inventory systems, third-party logistics, outsourcing, and information sharing.
On a final note, retailers are constantly having to compete with one another on quality, price, flexibility, and speed. A great way in which retailers can differentiate themselves from their competitors is by focusing on their core competency, in other words, what they do best. But just focusing on and providing this core competency is not enough. They need to have a way to relate their specialty to their customers. Digital Marketing is a great way to do this, especially for small businesses. Small businesses like Speir Heating and Air need to use digital marketing as a medium to communicate with customers. They can find out what their customers like and don’t like, offer promotions, and provide them with daily, helpful information.