Just How Tailor-Made Can Supply Chains Be
A supply chain is a system that encompasses just about everything that gets a product from the supplier to the customer. Think of each ‘link’ as the organizations, people, activities or any other resource needed to move a product to the end user. Literally every product can have its own supply chain, and with varying levels of complexity – it can be as simple as the milk sold at a local grocery; or as complicated as an aircraft built from hundreds of thousands of parts, supplied by different manufacturers. In most cases, it is up to the customer to build the supply chain that best suits their needs.
With the choices made available to modern suppliers and customers, it raises the question – just how tailor-made can supply chains be? Let’s start with the long answer:
Supply chains are surprisingly adaptable nowadays – recent advances in different sectors (technological, logistical and financial, to name a few) allow every product category to have its own distinct supply chain structure that can be tailor-made to fit virtually any individual end product.
Take for instance transportation: we’ve certainly gone a long way from shipping break-bulk cargo (cargo shipped in barrels, bags, wooden crates and drums) to the introduction of intermodal shipping containers (more popularly known as ISO containers). With the introduction of technological innovations in the shipping industry, importers were given more options to customize their supply chains: flexitanks allow wine importers to ship wine in bulk without worrying about degradation; it also allows small oil distributors to ship several different petrol types in a single container, maximising a single container’s capacity.
Supply chain management has certainly benefitted from recent developments in the communications sector, especially the internet. Internet-based communication now makes transactions possible without both parties having to meet personally. Customers are now given the power to pick from a global smorgasbord of suppliers without being encumbered by logistical issues such as long shipping times, difference in time zones, and language barriers. Shipments can be tracked remotely. The condition of the product can be monitored during transit, regardless of whether at sea, on train tracks, or in a truck. Overall, costs can be lowered without compromising quality.
Let’s take the Business Process Outsourcing (BPO) industry as an example. For the unfamiliar, Business Process Outsourcing involves contracting business processes to third parties – the supply chain is focused on services rather than a physical product. A telephone company, for instance, would need a bigger workforce to handle incoming calls, and they can now make from their choice from a number of several companies that would fit their requirements (on costs, skill sets, staff size, data security, even language preference).
So, just how tailor-made can supply chains be? The short answer is: supply chains can be tailored down to the smallest details – which organizations to deal with, which people to hire, which services to engage. The sheer amount of customization options can daunt even seasoned entrepreneurs – some would opt to rely on antiquated, ‘traditional’ supply chain structures just to be on the safe side; others would at least weigh the benefits against the drawbacks and consider their options. Finding the perfect fit is now just a matter of choice, after all.