WHAT IS SUPPLY CHAIN AND LOGISTICS? PART 1
Welcome to this 5 part series describing Supply Chain and Logistics (SCL)! Often people are curious regarding what exactly is SCL? We hear on the radio that it employs many people and we know it covers many activities. At a macro level SCL includes the purchasing, moving and converting all goods and services required to meet consumer demand. From the beginning of time, the forces of supply and demand have been at work and SCL providers have been determining how to supply the products to fill demand at the most efficient and effective means possible.
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On a more micro level SCL is locating the right suppliers, purchasing the raw materials from those suppliers and setting up all the logistics including the transportation to get the goods from the source to the customer. The process of converting the raw materials to finished goods is where the value added activity takes place that actual creates wealth in our society.
For example if you were buying steel in large qualities you could look at various steel mills on a global level to get the best quality at the most cost effective price. You may even look at the mining process itself to better understand the steel mill’s supply chain. The steel mill is provided with specifications it must meet in order to sell the product to the buyer. The buyer of the steel converts the steel into other products that are in demand such as structural steel for construction or sheet metal for automotive body panels. Once the product is produced the supply chain warehouses the product and then ships the product to the end customer. If the customer has a problem with the product, SCL makes the arrangements to ship the product back to the plant for analysis and corrective action.
But imagine if it is a new supply chain that did not exist before, then SCL has to purchase all of the equipment and machinery to start everything from scratch!
If you were going to focus on doing one thing right in SCL; what do you think that one thing would be? Stay tuned for part 2.
Written by: Bernie Keras
Supply Chain Faculty Head
Bernie has 28+ yrs Supply Chain and Logistics experience in industries such as automotive, heavy manufacturing and food production. Bernie started as an Expeditor/Scheduler and his last position was Senior Manager of Procurement. Some of Bernie’s previous employers include General Motors, Westinghouse, Siemens and McCormick Canada. As a life-long learner with a Bachelor of Arts Degree (Economics) from Western, a graduate of the Canadian Institute of Management (CIM), Purchasing Management Association of Canada (CPP), and more, Bernie is sure to be a great leader and mentor for his students.