![]() At the tail end of the supply chain are the retailers who sell products directly to consumers in shopping centers, stores, and online. A distribution center can include refrigeration facilities to preserve perishable products. Distribution centers are regional facilities that house the products to be redistributed to retailers, wholesalers, and, sometimes, directly to consumers. At this point in the supply chain, the products arrive at another site with one purpose: to distribute the product to retailers. Examples of transportation companies include freighter, container ship and trucking companies. Warehouses are often located in major hubs where those involved in the next link in the supply chain can acquire them and ship them to distribution centers. Once the products are sold, they need to be stored. Also known as sellers, vendors sell products to the next link in the supply chain. For example, in the energy sector, energy producers use raw materials, such as coal, to produce a form of energy for consumption. Not all supply chains produce physical products. These are the companies that create the products available for sale, turning raw materials into products for consumer use. This includes companies that process raw materials, such as metal, rubber, and wood, from natural resources. The important role of supply chain management and its impact on economic growth is possible because of the entities involved in the supply chain, which include the following: Supply chain management sets the foundation for economic growth by enabling the exchange of goods between businesses and consumers. When a manufacturer is unable to get raw materials from one supplier because of a trade policy, it must be able to adapt quickly and pivot to a new source for its raw materials. This affects the initial stages of the supply chain, where manufacturers need to incorporate sustainable practices and sourcing in their operations. They want to know about products that are climate-friendly. ![]() Consumers have become more aware of how products are manufactured. They can buy products in physical stores or online, for example. ![]() Consumers have many choices when purchasing products. What supply chain management is today is largely a result of market evolutions, digital transformations, and changing consumer preferences. But lessons from the recent disruptions highlight the importance of flexibility in the supply chain management process. In the past, the supply chain management beginning-to-end model was mostly rigid - every link in the chain was touched in consecutive order to get a product from raw materials to the consumer. Each supplier acts as a link that moves a product along a chain of production, from raw material suppliers to manufacturers to retailers. Supply chain management involves a network of suppliers connected via a centralized management process. Without the supply chain, we would not have access to food and health products, or the items that allow us to work, travel and entertain ourselves. Supply chain management is the handling of the entire process of turning raw materials into a final product. From sustenance and shelter to the way we work and entertain ourselves, a well-oiled supply chain is critical for maintaining economic stability and a functioning society. Supply chain management keeps the mechanisms of supply and demand operating smoothly so that people have access to goods and services. This logjam provides a visible example of the importance of effective supply chain management. Take, for example, the more than 80 container ships that were waiting to be offloaded outside California ports in mid-November 2021 as the holiday shopping season began, according to a Bloomberg report. It includes all the processes involved in getting products to customers, such as shipping.Īs the global economy recovers, demand and supply continue to be at odds with each other. What is supply chain management, and why is it important? Supply chain management is the overseeing of the flow of goods and services from raw materials to final products. Geopolitical issues such as the U.S.-China trade war added to the disruptive forces affecting the global supply chain. were lost early in the pandemic, according to the National Association of Manufacturers. ![]() Approximately 1.4 million manufacturing jobs in the U.S. The pandemic also caused one-fourth of companies to experience a 50% drop in sales, according to the World Bank. companies saw their supply chains disrupted early in the pandemic. When COVID-19 began to spread in 2020, many factories and businesses shut down, impacting the global supply chain.
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