Friday 1 March 2013

What is a Supply Chain?

Authored by Mickey North Rizza 

I was with my husband at a recent event and an old friend of his asked what I did in the business world. I told him and then he said, “Wow, is what you do related to what some call Supply Chain?” I of course told him yes, and then this highly educated man said to me, “What’s a Supply Chain?” I laughed and proceeded to tell him the following:

A supply chain is series of steps (or links on the chain) that are utilised to take a concept or product idea into a real product that is delivered to another business or consumer.

I then proceeded to give him an example, such as shampoo on the store shelf that was developed by one company (brand owner); sourced to another company for manufacturing; put into a bottle, packaged with others in a case, and loaded into a carrier; shipped to a distribution point; and finally transported to the final store for the consumer to purchase off the shelf. The series of steps are typically new product introduction, planning, sourcing, manufacturing, deliver and customer service.

He smiled and told me he now understood this term he had been hearing in the news in recent years. He also began to describe to me this definition in terms of the medical profession and delivering products and services to his patients. I was most impressed by his quick study. He left me wondering – if he could understand supply chain so clearly perhaps there is still a chance to take more cost out of the healthcare industry as a whole? After all, a supply chain is pretty basic to understand and taking costs out are what businesses do to increase profitability.

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