Supply Chain Process: From Starting to End Explained

Supply Chain Process: From Starting to End Explained

Supply chain finance refers to a number of financing options typically targeted towards businesses to help them better optimize their operational efficiency and generate higher revenues.

Both the government as well as public and private sector financers, are offering varied forms of such financing to assist businesses to meet multiple financial needs.

  • Rs.150 billion – Awarding of funds to companies by the DMICDC for multimodal logistics hub development in NCR, Maharashtra, and Gujarat.
  • Rs.195 billion – Approximate joint investments by Indian and Dubai-based organisations for the completion of various logistics projects.

These funds aim to improve the end-to-end supply chain process through infrastructural sustainability in the logistics industry along and other upgrades.

Coupled with the availability of supply chain finance through various lenders, the operational infrastructure in the country is expected to improve in tandem.

Businesses must, therefore, have a clear understanding of the supply chain process end-to-end for efficient operations and optimisation of their distribution system.

End-to-end supply chain process explained

Below given are the steps involved in ideation, implementation, and management of the supply chain from starting to end.

  1. Process planning

The supply chain process begins from the stage of planning strategies and ways to implement them. Know that supply chain finance is integral to the entire process plan for effective implementation.

Long term benefits can only be achieved if all the stages of the process are sorted initially. It can include product/service demand, feasibility, workforce requirement, working capital involved, profit estimation, and such other factors.

  1. Sourcing and inventory creation

The next step consists of figuring out the sources/suppliers for raw materials until up to maintaining quality pre-distribution. Cost-effectiveness is of essential consideration at this juncture as the profit generated will significantly depend on the cost you incur on raw material sourcing.

The stage also involves procuring and updating inventory, which acquires a significant chunk of supply chain finance.

Employing efficient inventory management techniques help save cost, business owners should consider implementing the likes of FIFO, setting par levels, etc.

  1. Production process

Following in line is the production process, whose smooth functioning is entirely dependent on a coordinated flow of other components like planning, supply, funding, etc.

The production or manufacturing process encompasses initial designing of the product or service to testing, packaging, and synchronising the finished product for delivery.

As variation is inherent to this process as per customer demands, companies must arrange for additional finances that help meet the variation margin.

The financial market thus provides these funds as business loans to help enterprises make an additional investment as and when needed.

  1. Transportation and delivery

While transportation is widely considered a supply chain process undertaken after production, it also includes raw material procurement as well. Infrastructural availability is the initial requirement to procure raw material and complete transportation of finished goods to respective locations for delivery.

The improving scenario for logistics infrastructure in the country like dedicated freight corridors, container freight stations, etc. only provides the necessary support for this process.

  • $2015 billion – An estimated size of the Indian logistics sector by 2020-21 as per CARE Ratings.

Businesses must, however, choose manufacturing locations that remain in the vicinity of the necessary infrastructural facility.

The delivery solutions must also be cost-efficient and customised as per the product type to be delivered to the end-user.

  1. Product Return

This is the final stage of a supply chain process respective to production line-ups which deal with returns of damaged or defective products to the company/supplier.

Management of products returned is one of the essential links in the chain as it affects customer satisfaction and business prospects.

A business must invest in a proper return facility and set up a responsive unit for grievance redressal, commonly known as customer support, to create an adequate return process.

With these steps in mind, you can now start with or improve on your existing supply chain process for effective implementation. For any additional investment required, you can look for supply chain finance from lending institutions. Financers like Bajaj Finserv also offer to fund in the form of business loans.

They further make the process of availing finances quick and hassle-free with their pre-approved offers. These offers are available on several financial products, including business loans, personal loans, home loans, etc.

With a proper solution to supply chain finance, you can now proceed to implement necessary changes to improve the process’s management at every stage. Know that a well-planned supply chain system not only leads to timely production but also effectively meets customer requirements.

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