3.2 The supply chain network
We know that the supply and distribution networks of firms differ greatly and that there is no universal model of a supply chain which we can apply to all firms. Each firm is unique and differs from another in many ways. Each deals in different products, has different markets, has different access to capital and finance, has to operate in different political and economic environments, and has its own management and human resources which are different from others in terms of motivation, acumen and vision. All these factors affect the way in which firms operate and compete in the market place. The common reality is the competition and each firm must employ all its resources in its own unique way to emerge as the winner in its own domain.
Remembering the diversities among firms, we can, however, say that the basic structure of any supply chain network would consist of following elements:
the facilities |
plants, warehouses, distribution centres, retail outlets |
the transport systems |
inbound transport, outbound transport |
the information network |
the communication link and databank |
the inventory |
the inventory in various facilities, and inventory in transit. |
While the above is a generalised statement, we should appreciate that a firm's supply chain network can range, in terms of structural complexity, from being quite simple to a highly complex one. For example, the warehouses or distribution centres can be spatially located in a single echelon between a plant and the retail outlets or in multi echelons. In Europe many firms have a European distribution centre (EDC) which directly feeds the retail outlets from this EDC, while many companies have several regional distribution centres (RDC) between the EDC and the retail outlets.
The same observations apply for other elements like transport, which may employ one or many of the transport modes, and inventory. The situation is unique in each case and will vary from industry to industry, firm to firm and area to area.
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