The phases of the supply chain

The concept of the supply chain is one of the most fundamental in today’s business vocabulary. In fact, it is so broad that studying it is virtually equivalent to studying business management as a whole, and it encompasses a world too vast to be treated in any terms other than as a general concept.

And yet, it is not useless. Thinking about the supply chain as a whole and the universe of concepts associated with it can help us better understand some processes and act on them more effectively.

In this article, we want to define this term and explore its various stages.

What is the supply chain?

This term covers the entire process of selling a product, from its creation to the delivery to the final consumer. This means that it necessarily involves various activities and resources in coordination.

The phases of the supply chain

Given the vast range of different activities that may be involved, it is impossible to list them all. However, we can make some generalizations.

There is a primary distinction made between the production phase and the distribution phase of the supply chain. The first concerns everything related to the creation of the product itself. The second has to do with the way it reaches the customer.

We can take a closer look at what happens by dividing the chain into typical phases:

1. Planning

This is an indispensable principle. Planning, preparation, and establishing operations is the first step toward a successful future. This applies not only at the start of the process, but continuously, since a company’s needs and circumstances are in constant transformation and must remain adaptable.

The entire plan must take into account the specifications of your business, your resources, and your market, in order to define specific and quantitative objectives, as well as the detailed way to achieve them. This includes the expected number of orders, researching suppliers, warehouse capacity and usage, technology used, market studies, cost estimates, etc.

2. Procurement of raw materials

The first step in the supply chain from a “practical” point of view is the purchase of raw materials or components. The guidelines for procurement should follow the established plan.

The different activities in this phase may include contacting suppliers, negotiating prices, receiving and recording materials, storage, etc. One of the main goals is the establishment of strong partnerships with suppliers, so care in paying on time, good communication, etc., can be a decisive factor.

3. Production

This is the phase in which the company actually creates the product, from raw materials or components. This is, of course, a stage divisible into a myriad of subprocesses, depending on the complexity and type of production involved.

One of the common initial processes is often the assessment of the materials purchased from the supplier, in terms of quality, quantity, and price. This control also applies, of course, to the final product.

Good analysis and organization at this stage make it possible to achieve a higher-quality product and reduce inefficiencies and production costs.

4. Inventory management

This phase is common to industrial and commercial companies. Inventory management involves knowing exactly which items you have and in what location. This makes it possible to seek a balance between available inventory and orders.

Warehouse management, where inventory is stored before sale, involves space organization, arranging, handling, etc., with a view to optimization. Nowadays, this management is often done with the use of specialized technology.

5. Distribution

This phase consists of delivering the order to the final customer. The main goals are customer satisfaction and efficiency.

This includes the packaging process. The importance of fine-tuning this process, choosing suitable packaging and methods, should not be underestimated. It can make a big difference in production and transport costs, in the impression made on the customer, and in reducing the number of returns due to damage suffered in transit.

Choosing the right logistics partner is a crucial point, even more so in today’s competitive market, with the growth of e-commerce and the emphasis on speed, accuracy, and convenience for the customer.

InPost is a European leader in a distribution approach based on non-home delivery, through Pack Points and Lockers. This strategy is becoming increasingly popular, offering major advantages to both companies and customers. Find out more about what InPost can bring to your business on our website.

6. Returns

What has sometimes been called “reverse logistics” has achieved a unique prominence in the e-commerce era. The simple fact that the customer buys a product before being able to see or try it means that this is so.

The return policy is therefore one of the most decisive factors today for completing the purchase and retaining the customer. Give it special attention and establish a detailed returns policy that inspires trust. The way you handle returns greatly contributes to souring or strengthening your relationship with customers.

InPost also offers advantages in this area, enabling a simple, efficient, and very convenient system. Join us and see for yourself the advantages of this model.