Google ‘supply chain’ and you’d get the following definition; “The sequence of processes involved in the production and distribution of a commodity”.
It is our belief at The Logistics Business that the supply chain goes beyond that with the name itself suggesting a linkage across the whole business. Invariably, a chain pulled on one side will in turn be pulled on the other, hence the reason supply chain goes beyond production and distribution and covers the entire business.
In addition, the buying decisions of a firm’s procurement will have a fundamental impact on the storage of inventory, along with the sales strategy of a marketing department, resulting in the need for a higher rate of labour within a warehouse to handle demand. Evidently the supply chain is affected by numerous aspects of a business with a common issues being the silo approach to supply chain in which there is no recognition that the dog wags the tail.
At The Logistics Business we regularly get told that the supply chain is holding back the business. However, look further into the detail and it is in fact the lack of integration between departments which is holding back the business.
The sales forecast of a marketing department is something which could aid stock management. It would enable supply chains to get the right stock, in the right place, at the right time. The concept is simple yet in complex organisation this line of communication seems to be stripped away. Increasingly through the rise of big data, key data is drowned out. This is why the importance of Business Intelligence tools providing a consistent holistic outlook across a business is becoming fundamental to the success of a supply chain.