Supply chain management represents all of the working parts of a business process from beginning to end; with the ultimate outcome of delivering a product or service to a customer.
Different segments of a supply chain are fulfilled directly by a company, and customer facing, while others are completed by third-party vendors, suppliers, and strategic partners.
On a large scale Wal-Mart, the world’s largest retailer, deals primarily in supply chain management. In fact, Wal-Mart does not actually produce anything (Friedman, 2006 pages 152-153).
The advantage of focusing on the supply chain allows a company to channel resources to yield the highest possible return and leverage the single thing they do well. Meanwhile, noted business thought leaders encourage businesses to focus on the single quality that they are the best in world (Collins, 2001) (Welch & Welch, 2005).
The Supply Chain In Action
This principle is at work within the context of your small business as well. For example, I started a window cleaning business in South Florida. I grew the business through advertisements and strategic alliances. Property managers, janitorial companies, and maid services hired my company to do their window cleaning jobs. My company became part of their existing supply chain.
When a customer would look for a quality company to clean their windows they would contact their property manager or the company that cleaned their house. Instead of each company hiring a separate crew to clean windows in addition to equipment and training, they would simply hire my company.
The simple task of residential window cleaning was a small part of a supply chain for property managers and similar companies that managed multiple projects for customers.
Several companies I worked with primarily managed a supply chain of specialty services for homeowners and businesses. While this sounds extremely easy, the more sections of a supply the more complicated the task becomes.
Scheduling between property managers and all the various service providers was a moving target. In instances of parties at people’s houses, there would be an order in which different services needed to be performed for optimal performance. If any aspect of those services were delayed or changed it could change the whole sequence of events. The challenge was ensuring various schedules accommodated the customer without inconveniencing them.
The Italian Shoe Maker
Recently, I went on a trip to Italy. I was amazed at the quality of lace, shoes, leather purses, and wallets. I went with my wife to purchase a pair of handmade Italian shoes.
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