D3 Critically evaluate supply chain concepts, principles and processes, and their interrelationships with other areas of an organization.
The business was the repeating of the selling and buying of the product or services, but it has a lot of the process to be done before the sale, it was an important factor and cannot be avoided it you still doing the business, all of these processes can be called as supply chain, supply network or supply web. The supply chain was actually a chain that connects all the processes of production such as the development of the product, cargo freight, sourcing of the product, packaging of the product, and so on. It can also explain as the supply chain was a chain of processes from the start to the end, from Produce to the selling. It was aimed to maximize the effectiveness and efficiency of production and sales, minimize deficiency and error. The supply chain was a huge system that will include all the parties directly or indirectly such as the manufacturers, supplier, transporter, warehouse, retailer, and the last was the customer.
The reason for the supply chain will be related to so many parties; it will totally bring a problem which is the complexity of the chain. This type of problem can be clearly found in the production company especially in the big company. As a result, the big company will always conduct an effective communication system to communicate with each party easier. This was very important to the supply chain and people conclude it as a few principles such as dynamic reconstruction principle, quick response principle, and demand-driven principle. It was about the reaction and adaptability of the supply chain to the market.
Except for external relationships like suppliers, the supply chain is also related to the internal relationships in the organization. An organization can say as the fundamental of the supply chain, and it will totally affect the structure of the supply chain. The supply chain has an important connection with the consumer about how consumer demand, what consumers want, all of this will finally react in the supply chain. When it talks about the consumer, here comes the Marketing department which may bring an impact on the sales volume when doing some promotion, advertising, strategy and so on. As the result of the sale increase, the supplier and manufacturer will also receive a big impact in production because of the increasing of the demand and wants, other else maybe when the product changed or adapt, it may need to find another potential supplier or the manufacturer to support the change if the old supplier and manufacture can’t provide the suitable support to produce the specific demand product. When a change has been done, it may affect the cost, and this was related to the financial department again. When the demand has increased, the production is also increasing then it will totally increase the cost of production in the supply chain. As to conclude, each area of the organization was very important and has its own function it was the cornerstone and main mandrel of the supply chain to construct and function well.
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