Supply Chain-What is it? No, Really What Constitutes a Supply Chain?

Reflective Article | Educational | Time: 3 min read

Just the other day a scientist & I got talking and he asked me, "so what do you do?" Nullifying the response with a start-up founder, consulting and throwing in the supply chain and operations functional expertise; I thought that was sufficient information. Little did I know, I probably confused him or he wasn't too used to all the jargons (mind you, I don't use many but yes these concepts are alien territory for those out of this arena!)

I have found it really difficult to come up with one word that completely encapsulates what supply chain professionals really do. So if you think of Marketing there's an easy visual of someone who sells (yes, yes-they are two different concepts and there's branding and communications but in a nutshell they're all marketing or aka selling), then when there's Finance bam what comes to your mind is numbers and accounts and pricing and what not, followed by Human Resources-quite a no-brainer there it's in the name itself all things related to people. But what's it that supply chain does? Trust me, it took me a good 10mins to explain the scientist what I and the folks in my function actually do. And this is precisely why I am penning this down today. How hard can it be to really get the crux of what we do, right?

So, let's begin with a product in mind-for ease of understanding I am going to pick a product that everyone needs, uses, has used or will use at some point in time-a vehicle. Now an automobile that we use is the end product that's rolled out and sold (see how I got the marketing reference right back in :) ) So let's work backwards, there's a need for automobiles as people need to locomote thanks to globalisation and relocating or travelling is just made so much more easier. Well, so technically there's a demand and once it's sensed the firm in question must supply a be-fitting automobile for the users. Now it's common knowledge that vehicles aren't analogous to perishables like food that can be ordered in immediately and a product is made from scratch and delivered. It requires the right blend of time to manufacture. Yes so, manufacturing is a sub-function of supply chains. This implies, to make the product a set of items (think ingredients, if food's how you understand) are required to ensure the product is made of. This is the raw material or even an assembly, so clearly procurement is a prior sub-function of a supply chain. Well, who would you procure from? Vendors, correct? Well, then vendor management and sourcing the right mix of vendors and material providers is all another sub-function in supply chain. Most would debate that supply chains should only have to incorporate the supply side and aspect of the business i.e. the sourcing, procuring and vendor managing bit. But that's just one half of the supply chain if you ask me. After all what's to be supplied and to whom? A befitting product to the user. So, we're yet to get that in order and up and about, rolling out. Well, so it's clear enough that we know the making of the product and all the raw materials that go into it as well as the sourcing of vendors all constitute to one aspect of the supply chain. Now, all this doesn't happen to move along from one destination to another, there's a 'chain' that keeps the flow of information, material going on. This precisely is where logistics of transportation, that's in-bound (from vendors to the manufacturing unit) comes into play. Some supply chain networks may constitute a layer of a warehouse/cross-dock prior the materials reach the manufacturing unit. This is primarily to consolidate a set of loads and then get all of the required material at a particular instant. You would now be safe to assume that post the make stage, there's another set of logistical requirements to be catered to-outbound transportation. The product that's made is then transported out for delivery. Some, designs again would have a de-consolidation hub of sorts to ensure the products are disbursed to different locations. However, let's move a step back; before despatches it would be necessary for the product to be appropriately packed, labelled and sent out. That's again a call taken by the firm whether to outsource it, allow it to take place at the manufacturing unit or at the de-consolidation hub. Some, go a step ahead and get a few sub-assemblies as add-on parts packed straight from the sourced vendor (Eg: in this case could be an additional key/seat cover etc.) At large scales, the de-consolidation hubs then move to distribution centres and finally a last mile delivery. Since, this is the point of contact with the customer a good deal of demand sensing information relays from this end. For instance, whether the product's specifications are at par with competitors, any changes ought to be relayed back to the make and eventually the R&D team. In fact, branding campaigns, launches and of course miscellaneous goodies are all thought out at this touch point and accordingly incorporated at the cost stage. Yes, all this is also a key segment of the supply chain at a strategic level and definitely workable without the inputs and teamwork of the rest of the functions. A very key aspect that's left post the sale and delivery is the returns management aka reverse logistics in a way. Well, it flows through the same stakeholders in the backward direction and thus it's best for firms to ensure this bit of the service and experience is also well thought of, here's where the need for quality and processes steps in. Yes, this too is under a supply chain; however it's a great mindset to ensure quality and a process approach are amongst all functions.

While the scientist got a gist of this, be still asked me what aspect is it that I do, after all it's so vast, variegated and wide. To which I said,"that's the beauty of it, I could be doing a bit of one aspect one day and another on another day but its just satisfying to know that bringing method to all this madness requires the presence of a skilled supply chain professional". Generally overlooked, there's a lot that we do and if I'd be safe to quote; over a conference early this year a professional mentioned, "how about getting marketing under supply chain?" Well, with technology enablers and touching upon costs as a pseudo financial function apart from the human management and arriving at double or triple shifts-well we're pretty much all over the organisation. I'd just say there's a supply chain guy in each of your functions' who's silently running the show.

I do hope this is not a less understood topic, concept and role anymore; and if this article aided in your enlightenment I would be glad to hear back on your views as comments. And yes, as businesses evolve so do supply chains; so there are many more aspects that younger, resilient and agile supply chain designs may have included or even eliminated (think: Zara's make to sell, eliminating any form of warehouse and middlemen), but that right there is the beauty of its flexibility and adaptability.