In business today the competition is not between a company and another company but between supply chains. A supply chain is a network of factories, suppliers, distribution centers, retailers, and warehouses. That is where materials are acquired, altered, produced and delivered to clients. A supply chain is a dynamic process and involves the constant flow of information, materials, and funds across the many functional areas within and among chain members. The members at the series should collaborate with their business partners to have the ability to optimize profits and so as to satisfy the requirements of consumers. Managing the collaboration is a tough task due to the participation of several parties. All these parties have their own objectives and resources.
There is no single authority over all the chain members when it comes to chain supply. Cooperation is made through negotiation and not central management and control. The process which takes place in different stages requires real-time cooperation in the operation and decision-making of the different functional areas, tasks, and organizational boundaries. This is to make sure that they will be able to deal with uncertainties and issues. The focus ought to be on quick responses and services will be achieved with collaboration and lively formation of supply chains.
In increasing the responsiveness to the changing industry to the business conditions, supply chain management in Mexico has come to be a highly effective technique. It also enhances these businesses’ competitiveness. Today there is intense competition and the global economy is increasing. For a business to survive and grow, it should enhance its market responsiveness and become cost competitive. Supply chain management is a method of breaking down the linked set of values creating activities from raw materials to the end products that reach the consumers.
A distribution chain will link retailers, producers, customers and providers in the chain. This helps in creating and delivering goods as a single virtual company of resources and skills. Supply chain management is a process that synchronizes the flow of physical goods and associated information from the production line of low-level component suppliers to end consumers. This results in the early provision of notices of demand fluctuations and synchronizing the processes of the business.
Requirement and the significance of supply chain management increases in future. This is because clients will be demanding delivery of orders in a way that is fast. Producers will need to have greater knowledge of order requirements to be able to better plan its processes and operations. Additionally, the entities that are external need to increase coordination among the consumers, providers and service providers. This will ensure that there are greater visibility and coordination throughout the supply chain.