Supply chain Essay Example for Free

Supply chain Essay In a production business the supply chain is one of the most crucial components to ensure smooth operation. In the retail and FMCG industry, the business is only about an excellent supply chain. The quality of the product is actually secondary. But the concept is now also applicable for software industry as well, because now software’s are outsourced and delivery is also crucial. But how do we identify whether the supply chain is performing optimally. For a production line, the effect will be immediately evident from the hourly production rate. A minor change or alteration in the supply chain, will affect the entire production line. The rate per hour will get hampered and the work will get slowed down. In this situation one needs to identify the point where the supply chain is getting hampered. Once it is done, the job is to streamline it and bring it to its optimal efficiency by SWOT (Strength, Weakness, Opportunity and Threat) analysis. This will also reduce the cost and time will be saved. However, for a FMCG or retail sector, the identification is not immediate, because buffer stocks are kept. Hence, the shortage or the inefficiency is not easily identified. When you feel the shortage or overage of stocks you can understand the scenario that the supply chain is not functioning properly. Another key indicator is the reduction in sales figure. The sales will take a hit, if the goods does not arrive at the right time, stocks are few and the demand is either not getting fulfilled or the supply is more than the demand. In this scenario the best option or rectification is to shift to JIT concept of supply cycle. Â  This JIT (Just in Time) concept is very effective, because neither are you over-stocking nor under-stocking. Also, the cost is getting reduced along with optimization of time. The software sector is very new to this concept, but an early understanding will be of great benefit in the future. Identify the lacuna and structure an efficient supply chain.