Question

Supply chains are integral systems for the production and distribution of any product. Discuss how supply chains operate within the industry sector where you work. What is a problem that you know of in the supply chain system? Explain how a linear optimization model could help preempt or improve that problem.

Answer 1

Discuss how supply chains operate within the industry sector where you work. What is a problem that you know of in the supply chain system? Explain how a linear optimization model could help preempt or improve that problem.

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. Companies develop supply chains so they can reduce their costs and remain competitive in the business landscape. A supply chain involves a series of steps involved to get a product or service to the customer. The steps include moving and transforming raw materials into finished products, transporting those products, and distributing them to the end-user. The entities involved in the supply chain include producers, vendors, warehouses, transportation companies, distribution centers, and retailers. The elements of a supply chain include all the functions that start with receiving an order to meeting the customer's request. These functions include product development, marketing, operations, distribution networks, finance, and customer service. Supply chain management is a very important part of the business process. There are many different links in this chain that require skill and expertise. When supply chain management is effective, it can lower a company's overall costs and boost profitability. If one link breaks down, it can affect the rest of the chain and can be costly.

Problems in the Supply Chain where I work (at MCD) : A typical food supply chain is made up of six stages - Sourcing of raw materials ,Production,Processing and packaging,Storage, Wholesale distribution and finally Retail redistribution to consumers

Traceability, or the ability to track the food product through all stages of the supply chain, is now more of a demand rather than a request among many consumers today. Many consumers now want to know where all products and their ingredients, even the trace ones, come from. This makes it more important than ever to have good data on food products and your supply chain. Having and sharing authentic information from each and every step of the food supply chain enhances food safety, strengthens brand integrity, and increases customer loyalty.

Today, the pressure on manufacturers to produce and distribute high-quality products that are safe is an increasing challenge. Some of the common causes we see that affect the quality and safety of food products which include: Poor storage and warehousing practices, Delays in transportation, Industrial sabotage and Inclement weather.

Fragmented information and lack of communication can have a major impact on the food supply chain. This is because there are various parties involved in the chain which have little to no knowledge of one another’s actions. Poor communication causes inefficiency, waste and can lead to mistrust among suppliers and their customers. This problem gets much worse when you are operating globally.

Running a food supply chain comes with many costs, some of the more important ones include - Energy and fuel costs, Logistics and freight, Manpower and Investment in new technology. These costs are significant, as such, keeping a check on operating costs is a constant challenge.