Supply Chain Essay

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What is a supply chain ? Supply chain is a process that includes activities that like movement of goods, services, information and money from the manufacturer to the consumer. The increased competition and the large variety of products that have been introduced have forced the companies to look into their supply chain processes. This is a byproduct of the era of Globalization. Supply chain is made of processes like procurement from suppliers of raw material from the suppliers which are then sent to manufacturing plants to be processed. The goods generated after processing can be finished or semi finished. These goods are then sent to the warehouse for intermediate storage and then sent to distributors , retailers and customers A supply chain can also be called a “Value Chain” as entities add value to the product at each stage of the supply chain whereby increasing the appeal in the eyes of the end customers leading to a purchase, Supply chain is not just a flow of goods and services but also includes the flow of information and money. The flow is a bidirectional flow which encompasses flow of information from supplier to consumer and consumer to supplier in the form of feedback. This flow of information and money should be taken seriously because at the end of the day customer satisfaction is the key element for any firm to be profitable. A typical supply chain may involve a variety of stages. These supply chain stages include: • Raw Material Suppliers • Manufacturers • Wholesalers/Distributors • Retailers • End Consumers The traditional outlook of supply chain management only focused on delivery f goods to the customer at the cheapest price possible but the definitions of supply chain has been altered over time.The new supp... ... middle of paper ... ...he customer is a part of delivery mechanism. Free On Board- It is the strategy of Factory Pricing where the buyer bears the shipping cost. Freight Absorption Pricing – It is the strategy in which the parts of transportation costs which are in line with the competitors are paid. Uniformed Delivery Pricing- It is the strategy in which a standard price is set for all the shipments irrespective of the location. Zone Pricing – It is the pricing strategy in which different price is charged for different prices for different zones i.e. geographical locations. 5. Return Merchandise Authorization – This process is commonly referred to as “Returns”. It is the authorization system that is responsible for receiving the defective goods and excess goods back from the customer. It is also a scheme to support customers who may be facing problems with the delivered products.
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