What is a supply chain?

An effective supply chain optimises the processes and resources of the company, which can represent a significant competitive advantage. Its design and management are the responsibility of various roles within the Purchasing department.

Degrees such as the Degree in Industrial Engineering prepare you to undertake responsible roles within this department. Programmes such as the Degree in Business Administration also offer an opportunity to complement technical knowledge with business strategy and planning.

Moreover, if you are interested in specialising in the supply chain and everything that encompasses national and international trade, the Master of Business Economics will provide you with the necessary knowledge to develop and work in professions related to this field.

Definition of supply chain

The supply chain is the journey a product takes from its creation to its delivery to the final consumer. It encompasses all the processes and intermediaries necessary to transform raw materials into finished products and their distribution in the market.

The main actors in any supply chain are as follows:

• Suppliers: those who supply the raw materials.
• Manufacturers: those who transform the raw materials into finished products.
• Distributors: those who handle the storage, handling, and transportation of finished products from the manufacturer to points of sale.
• Retailers: the shops or points of sale where the products are finally purchased by consumers.
• Consumers: the final buyers of the product.

What is a supply chain for?

The supply chain is a critical component for companies and commerce in general. Its primary objective is to ensure that products reach the right place, at the right time, and in optimal conditions, at the lowest possible cost. Below, we break down its functions:

• Efficient management of resources and materials: achieved by managing inventory to avoid excesses or shortages. This is crucial for maintaining uninterrupted production and minimising operational costs.
• Optimisation of production: by coordinating production with actual market demand, companies can adjust their manufacturing processes to meet customer needs.
• Improvement of logistics and distribution: a well-managed supply chain ensures that products move smoothly, minimising delivery times.
• Customer satisfaction: by ensuring that products are available when and where they are needed, companies can meet customer expectations.
• Cost reduction: by optimising each stage, companies can identify and eliminate inefficiencies, resulting in lower operating costs.
• Continuous improvement and adaptation: companies can monitor the performance of their supply chain, identifying areas for improvement and adapting to market changes or new opportunities.

Types of supply chain 

Supply chains can be classified according to different criteria, each with its advantages and challenges. The choice of the appropriate model will depend on the nature of the product, market demand, and company objectives.

Supply chains by industry sector

Depending on the sector and the nature of the products or services traded, we have the following types:

• Mass consumer products: this includes the supply chain of the food and consumer goods industries.
• Industrial: this includes the production and distribution of industrial products, machinery, vehicles, and components.
• Technological: these affect electronic products, from components and devices (hardware) to software and services.
• Services: includes logistics services (transport and distribution of goods) and health services (production and distribution of medicines, medical equipment, and care services).

Supply chains by operating model

Based on the inventory maintained by the company, we find the following:

• Push: based on demand forecasts, where production is pushed towards the market.
• Pull: based on actual customer demand, where production and distribution are activated by specific orders. Special types of supply chain

Special types of supply chain

Finally, we find specific types of supply chain that are not mutually exclusive:

• Eco-friendly: integrate sustainable practices that minimise environmental impact and promote social responsibility.
• Agile: capable of quickly responding to changes in demand, crucial in sectors such as fashion.
• Lean model: focus on operational efficiency by minimising and optimising resources.

Who manages the supply chain? 

The management of the supply chain is a shared responsibility involving various actors inside and outside the organisation.

• Supply chain managers: oversee and coordinate all supply chain activities. Their job is to optimise processes to reduce costs and improve operational efficiency.
• Demand planners: analyse sales data and forecasts to determine the quantity of products to be produced. Their goal is to balance supply with demand to minimise inventory and avoid stockouts.
• Procurement managers: are responsible for acquiring the raw materials needed for production. They select suppliers, negotiate contracts, and ensure the quality and cost of the materials acquired.
• Production managers: oversee the manufacturing process and ensure that products are made according to quality standards and within established deadlines.
• Logistics managers: manage the storage, handling, and transportation of products. They ensure that products move efficiently through the supply chain.
• Warehouse managers: oversee storage operations, manage inventory, and coordinate the receipt and dispatch of goods.

In addition to these internal roles, suppliers, carriers, distributors, and retailers are involved in the supply chain.

Industrial organisation, which includes the supply chain, is one of the specialities of industrial engineering, one of the engineering fields with the most career opportunities currently. Universidad Europea offers a wide variety of Engineering degrees to choose from if you want to pursue a career in this sector.