Your supply chains

A supply chain defines an industry. Supply chains are normally more complex in manufacturing so a manufacturing example is a good way to see how they work:

Raw materials > Transport > Refined materials > Transport > Components > Transport > Manufacturer > Transport > Distribution and warehousing > Transport > Retailer

Each stage in the process adds value to the product and needs to make a profit for what it does.

In the services industries, supply chains have many less steps because labour is the main input.

Major players can control more stages in the chain. This can be more profitable, but it can be tricky if they are are buying into businesses that they don't know how to run. For example, the average widget manufacturer might not be able to profitably run a trucking company or a warehousing business.

Potential problems in supply chains can cripple your organization if you depend on being able to buy a certain commodity at a given price.

Task

Do a detailed analysis of your supply chains:

1. List all your main suppliers.
2. Draw a diagram of your supply chains.
3. Consider the risks of non-availability of supplies.
4. Consider the risks of price changes, including the cumulative effect of small price changes for a wide variety of supplies.
5. Consider the relative currency fluctuations for imported items.
6. Do you have wasteful duplication?
7. Could you simplify your supply chains to make them more efficient and profitable?