Everyday Supply Chains
By Iva Fedorka
A supply chain is the system of companies, people, activities, information, and other resources that one uses to procure a product or service.
Common Supply Chains
A typical supply chain starts with the ecological, biological, and political regulation of natural resources. The next step is the extraction of raw materials and their delivery to a processing or manufacturing site. Components or products are then processed, constructed, or assembled. Used products or components may also enter the supply chain as recyclables. Finished products are packaged, moved to storage, and ultimately delivered to the consumer.
Types of Collaborations
In some cases, these exchanges occur between different companies that have little or no knowledge or interest in other parts of the supply chain, a situation that has been called “extended enterprise.” Other types of collaboration are called “vertical” and “horizontal.”
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In vertical collaboration, two or more organizations from different levels or stages in the supply chain share responsibilities, resources, and information to support mutual customers. Horizontal collaboration is a relationship between two or more companies at the same level that cooperate to achieve a common objective.
Some companies and global brands integrate codes of conduct and guidelines into their supply chains, with specific standards and requirements for their suppliers. Others offer limited or no visibility into their supply chains, called mystification, and share little information about the origin of materials or processing and can hide irresponsible practices.
A Supply Chain Example
An everyday example of a supply chain would be your home vegetable and fruit garden.
- Verify that there are no gardening restrictions where you live (from the local government, homeowners’ association, or other organization)
- Acquire or locate the site for your garden
- Find a lab to test a sample of your soil, then source and buy any supplements or treatments that will help to make it more arable
- Make a plan for what you’ll grow and purchase seeds or seedlings from a seed catalog, a local farmer, or a retail store
- Locate a source and purchase the implements that you will need to weed, water, maintain, and harvest your garden
- As the fruits mature, collect, clean, and store them in the sourced containers; alternately, hire someone to help
- Identify or hire transportation to move your harvested crops to friends, farmers’ markets or other retail venues
Supply Chain Management
Supply chain management is an important aspect of modern business and includes tasks for finding or “sourcing” products. We have come to depend on retail outlets like grocery stores and other “big box” and online locations for nearly all of our purchasing needs. Imagine if we ourselves had to source all the products that we need or use — that would be really difficult! The supply chain also includes delivery of products to the customer.
Bachelor’s and master’s programs or certificates in supply chain management and logistics are now available at many colleges and universities.
Discussion Questions
- How did the COVID-19 pandemic disrupt supply chains?
- Track the supply chain for an item of cotton clothing, from fiber to you.
Vocabulary
- Collaboration
- Horizontal
- Logistics
- Vertical