Supply Chains
Have you ever wondered where your clothes are made? Where your Levi's zipper came from? Or where your iPhone was put together? They likely came from overseas by way of a supply chain.
Key Takeaways
Supply chain is the process of getting a product from point A to point B.
Companies develop supply chains so they can reduce their costs and remain competitive in the business landscape.1
First off, let's take your designer shirt that you may have purchased at your local mall. Where do you think it came from? Most likely it was made in a factory in Vietnam, shipped through Singapore in a big container, and then trucked to your local mall.
Have you ever wondered why all of your zippers say YKK on them? That's because it was likely manufactured by Yoshida Kogyo Kabushikikaisha, headquartered in Japan, but your zipper was likely manufactured in this factory in the state of Georgia, USA, where their largest manufacturer is located.
Lastly, your latest iOS device might have been assembled in this new factory of one of Apple's suppliers located here, just outside of Sao Paulo, Brazil.
So what is supply chain?
A supply chain is a network between a company and its suppliers to produce and distribute a specific product to the final buyer. This network includes different activities, people, entities, information, and resources. The supply chain also represents the steps it takes to get the product or service from its original state to the customer. 2
In other words, a supply chain is the process of getting a product from point A to point B. With how advanced technology has become, there are more ways than ever to transport your product.
The goal of supply chain managers is to get their product into your hands:
First, they negotiate with suppliers to purchase these raw materials.
Second, they ship those materials as efficiently as possible through trucks, ships, and trains.
And finally, they do everything they can to make sure their product gets to the store on time so you, as a consumer, can enjoy their product.
Why are supply chains important?
Without it, you wouldn't enjoy that car that you're able to drive or even that phone that you enjoy using. Everything you own is because of a company's supply chain. Without the supply chains, we would have nothing.
So how does supply chain compare to other areas of business accounting?
Accounting is the language of business with their income statements, and balance sheets. Marketing is the promotion of business. But supply chain and supply chain management is the business. They source the product, they make the product, and they deliver the product so you as a consumer can enjoy their product.
https://www.investopedia.com/terms/s/supplychain.asp
https://www.investopedia.com/terms/s/supplychain.asp