A supply chain represents the life cycle of a product between its point of origin and the point of consumption in the market. It is responsible for ventures such as operations, purchasing, manufacturing, transportation, warehouse and distribution centers. Supply chain encompasses the planning and management of sourcing, procurement, and conversion of a product as it makes its way to the consumer, thus Supply Chain Management is a complex process that is vital for any business operation that wants to turn a healthy profit.
Delivering a finished product to the shelves of a retail store isn’t an undemanding process. In the early stages of procurement an enterprise must recognize a specific need in the market for its product. Then it must examine all supplier options, exploring a wide range of vendors and negotiate reasonable price ranges before putting in a clear and definite purchase order for its product. Secondly, an enterprise must go through the delivery process of its purchased good, making sure it is delivered in a timely fashion. Preforming a thorough inspection, insuring no damaged goods were delivered, then either accepting on rejecting the product depending on its quality. The enterprise will check the invoice, the receiving documents, and the original purchase order before completing the transaction and paying. Finally proper book keeping must be done by the buying company to keep track of its purchased inventory.
When dealing with this complex process logistics allows enterprises to efficiently run their supply chain management by properly coordinating, planning and implementing proper procedures to ensure the most efficient and effective operation. Logistics is an intricate element of supply chain management that deals with details of transactions, timing, assigning an order of command, and moving quickly from one section of the supply chain onto the other, allowing for an effective back and forth flow between consumer and supplier.
