Supply chains are about flow: the movement of product from one stage to the next, from a starting point—a source—to an endpoint—a user.
We call them product streams, demand flows, pipelines. But supply chains are hardly these as streams and pipelines imply a single fluid in motion. What flows in a supply chain is not the one same item but a multitude of merchandise: parts, materials, components, and products.
Items also never remain the same as they weave through supply chains. It is a basic point of supply chains that items change and never stay the same. And not change for the sake of change but for the purpose of transforming to something that becomes more valuable from that where it came. Solid ores become metals. Metals become jewellery, spare parts, and the support beams for high-rise buildings. Crude oil becomes petroleum which in turn becomes gasoline, motor oil, and plastics.
Supply chains converge and diverge. They rarely follow a straight line. Many see their items originate from other chains and disperse to others. For instance, bauxite joins with caustic soda and other materials coming from other supply chains and are transformed together in a manufacturing facility into aluminium. The aluminium in turn becomes material for other supply chains such as for cans for beverages, foil for kitchen wraps, and wire mesh for window screens.
Enterprises comprise most supply chains. A fruit farm ships to wholesalers who ships to supermarkets and grocery stores. In-between are transport providers and storage facilities.
Capacities limit how much can flow through supply chains. The limits are also known as constraints and bottlenecks.
Policies, procedures, and controls govern the flow of merchandise through supply chains. These vary from one supply chain stage to the next and to whomsoever has ownership of the territory the merchandise is moving through.
It should come to no wonder that flows are not steady or uniform. Merchandise flows in fits and starts and in different mixes of product composition. Flows are never identical from one instant to the next. In a sense, flows may not even be the right word to describe what happens through supply chains as more often than not, merchandise moves in batches, surges, and waves.
Boosting productivity in supply chains is therefore a monumental challenge given the complexities and underlying uncertainties.
It would be easier to design a plumbing system and electrical schematic than it is to plan a supply chain. At least with plumbing and electricals, the product stream is far more predictable and homogeneous. It definitely is not like that with supply chains.
The nature of supply chain flow by itself justifies the need for engineering prowess. It is a daunting challenge but one that supply chain engineers are in the best position to undertake.
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