Theory Of Supply Chain Essay

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3.THEORETICAL BACKGROUND OF THE STUDY

1.1 MEANING OF SUPPLY CHAIN
Supply chain consist of all parties involved, directly or indirectly, in fulfilling a customer request. The supply chain includes not only the manufacturer and suppliers, but also transporters, warehouses, retailers and even customers themselves. Within every organisation, such as manufacturer, the supply chain includes all functions involved in perceiving and fulfilling a customer request. These functions include, but not limited to, new product development, marketing, operations, distribution, finance and customer service.
Supply chain is dynamic and involves the constant flow of information, product, and funds between different stages. The primary purpose of any supply chain is to satisfy customer needs and, in the process, generate profit for itself. The term supply chain conjures up images of product or supply moving from suppliers to manufacturers to distributors to customers along a chain. This is certainly part of thesupply chain, but it is also important to visualise information, funds and and product
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These decisions should enhance the supply chain value. These decisions are categorised into three phases:
1. Supply chain category or design:
In this phase, company decides the structure of the supply chain for the upcoming years. It decides how will be the configuration of the chain, how to allocate the resources and the process that to be performed at each stage. Here, the companies may think the option of whether to outsource or perform a supply chain function in-house, the location and capacities of production and warehousing facilities, the products to be manufactured or stored at various locations, the modes of transportation to be made available along didderent shipping legs, and the type of information system to be utilised.
2. Supply chain

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