What is a Supply Chain?

Supply chain is the process involving several entities in the manufacturing, distribution, and sale of a product right from sourcing the raw material to manufacturing to distributing until the finished product reaches the final customer.

instant business loan

ZipLoan is the Lender of Choice for Small Businesses.

Icon1

Minimal Documentation

No balance sheet needed

Icon4

No Prepayment Charges

After first 6 EMIs

Icon3

Receive Funds Within 3 Days*

Straight into your account

 What are the steps of the Supply Chain?

Below detailed is the stepwise process being explained involved in a Supply Chain:

  • Planning of the production: The first step is the Planning stage whereby the entities decide on the following aspects:
    • Origin of the raw material – If it must be sourced from the domestic or international market and from manufacturer or suppliers etc.
    • Production schedule – If the product must be manufactured as per the market demand and stocked or manufactured against an order. Also, if the product to be manufactured in several batches or one batch. Or if the product needs to be manufactured on a third-party basis or sourced from the marketplace.
  • Procurement of the raw material: Procurement is whereby the company sources the best quality raw material at affordable prices ensuring that it is delivered in a timely manner and in the right quantity.
  • Development of the product: The sourced raw material is then transferred to the manufacturing plant to manufacture and convert into the finished product.
  • Distribution of the product: The finished product is transported to the warehouse of the supplier from wherein the same is further transported to its final customer.
  • Return of the product: If the finished product supplied to the customer does not fit their requirement or are found to be damaged then the goods are returned. And a company to have an efficient after-sales service should lay down a system to maintain a database for selling of products, getting feedback on its performance, keeping count on the product returns, etc.

The entities that form the supply chain are the vendors, manufacturers, warehouses, transporters, distributors, and retailers.

What is supply chain management and why is it important for a company?

Supply Chain Management, as the name suggests is the management of the supply chain network which involves overlooking, tracking, and optimizing the activities of the entities right from the procurement of the raw material to the delivery of the final product to the customers.

If one entity of the supply chain fails to adhere to its responsibilities, then it disrupts the working of the other entities as they are interlinked and interdependent. This leads to a breakage in the supply chain impacting the fulfilment of the product demand. Hence, Supply Chain Management is essential for a company to avoid such mishaps and wherein all the entities involved are updated with the information to help track a problem, resolve it and thus streamline the entire process.

Supply Chain Management helps in a quicker production cycle, reduction in the cost, avoiding the delay, increase profitability, increase the customer value and thus be competitive in the marketplace. Thus, Supply Chain Management forms an integral part of business processes.

Solving Real problems

Ram Yadav

I have been running my business for over twelve years but have not been able to undertake expansion activities. I applied to Ziploan and they cleared my loan application in a very short span of time.

Kanchan Lata

I approached Ziploan for an equipment finance loan. Their eligibility criterion was easy to fulfill because it required only 2 years ITR and 10 lacs of annual banking credit.

Ready for Ziploan to
empower your business ?