and funds between different stages. In our example, Wal-Mart provides the product, as
well as pricing and availability information, to the customer. The customer transfers
funds to Wal-Mart. Wal-Mart conveys point-of-sales data as well as replenishment order
via trucks back to the store. Wal-Mart transfers funds to the distributor after the
replenishment. The distributor also provides pricing information and sends delivery
schedules to Wal-Mart. Similar information, material, and fund flows take place across
the entire supply chain.
In another example, when a customer purchases online from Dell Computer, the supply chain includes, among others, the customer, Dell’s Web site that takes the
customer’s order, the Dell assembly plant, and all of Dell’s suppliers and their suppliers.
The Web site provides the customer with information regarding pricing, product variety,
and product availability. Having made a product choice, the customer enters the site to
check the status of the order. Stages further up the supply chain use customer order
information to fill the order. That process involves an additional flow of information,
product, and funds between various stages of the supply chain.
These examples illustrate that the customer is an integral part of the supply chain.
The primary purpose from the existence of any supply chain is to satisfy customer needs,
in the process generating profits for itself. Supply chain activities begin with a customer
order and end when a satisfied customer has paid for his or her purchase. The term
supply chain conjures up images of product or supply moving from suppliers to
manufacturers to distributors to retailers to customers along a chain. It is important to
visualize information, funds, and product flows along both directions of this chain. The term supply chain may also imply that only one player is involved at each stage. In
reality, a manufacturer may receive material from several suppliers and then supply
several distributors. Thus, most supply chains are actually networks. It may be more
accurate to use the term supply network or supply web to describe the structure of most
supply chains.
A typical supply chain may involve a variety of stages. These supply chain stages
include:
• Customers
• Retailers
• Wholesalers/Distributors
• Manufacturers
• Component/Raw material suppliers
Each stage need not be presented in a supply chain. The appropriate design of the
supply chain will depend on both the customer’s needs and the roles of the stages
involved. In some cases, such as Dell, a manufacturer may fill customer orders directly.
Dell builds-to-order; that is, a customer order initiates manufacturing at Dell. Dell does
not have a retailer, wholesaler, or distributor in its supply chain. In other cases, such as
the mail order company L.L. Bean, manufacturers do not respond to customer orders
directly. In this case, L.L. Bean maintains an inventory or product from which they fill
customer orders. Compared to the Dell supply chain, the L.L. Bean supply chain
contains an extra stage (the retailer, L.L. Bean itself) between the customer and the
manufacturer. In the case of other retail stores, the supply chain may also contain a
wholesaler or distributor between the store and the manufacturer.
1. This flow chart shows a typical manufacturing supply chain work flow detailing which areas of the business are involved.
2. The sales department identifies a need for a product. The sales department tell the marketing department about their idea and provide any supporting information / data.
3. The marketing department use business analysts to support the project and to complete the research.
4. Data and supporting evidence is passed back to the marketing department for completion of a business plan.
5. A fully detailed business plan is forwarded to the Business Unit Manager / Directors.
6. This unit comprises of the senior business directors or managers who make a decision on the project.
7. After approval the plan is passed back to the analysts to prepare and implement the manufacturing process.
8. Details of raw materials and components passed to purchasing.
9. Purchasing work with logistics and transport to plan the purchase and delivery of the materials to the manufacturing plant.
10.Suppliers receive orders for product and then despatch on agreed transport on agreed dates.
11. Carriers approved by the business transport the raw materials and components to the manufacturing site.
12. Products are received into the warehouse and then moved to manufacturing.
13. Finished products are moved from manufacturing to the finished goods warehouse which might be situated locally or ina remote location.
14. Finished goods are put into inventory awaiting orders. The company computer system is updated. Product is now available to sales.
15. Customers place orders through customer services.
16. Customer Services take orders and input them to the company computer system.
17. The central computer system maintains transaction records and provided visibility of product for sale.
18. An order is completed and a pick list sent to the warehouse.
19. A copy of the order is sent to the export department for completion of export documentation.
20. Export department manages the final despatch of the product and produces any export documents.
21. Documents are sent to the warehouse to meet up with the finished order.
22. The order is despatched by the warehouse.
23. The transport company collects the consignment and delivers it to the customer based upon the INCO terms of carriage.
24. As stock has now been used the computer system generates a request for new stock.
25. The re-order process generates a request to the purchasing department to place new orders with the suppliers.
by
alangoca24 (student)
