Effective supply chain management requires you to be aware of every link in your supply chain, how they interact with one another, and any potential disruptions. Being fully informed in this way allows you to optimize your manufacturing and distribution processes, predict and plan for disturbances, and identify systems—or partners—that are not working well within the chain.
As with any system, the first step to understanding it is knowing what it consists of, and supply chains are no different. In this post, we’re going to look at various links along a typical supply chain, looking at what they do and how they fit in with the overall chain.
Raw goods sources – Fibers, polymers, leather, etc.
Raw goods providers will typically form the first link in your supply chain, though they can be easy to overlook when evaluating your supply chain. These sources can mostly be challenging to identify because they can range from tiny farms to giant operations. They are typically partnered with materials suppliers and have no direct contact with brands. For the clothing industry, raw goods sources provide things like cotton or nylon, leather and plastics, and any minimally processed material. Because they are not yet processed into thread or fabrics, the operations harvesting these materials are often not the companies selling to your company—a materials supplier will handle that.
Materials suppliers – Thread, fabrics, notions, etc.
Materials suppliers source raw goods of all kinds and typically build their business around supplying many materials for specific industries. Materials suppliers may have hundreds of raw goods sources depending on their operational size to ensure they can meet demands even when one of their sources is having problems. While it is rarely necessary to map your supply chain (article link) down to this finest of details, some companies still invest millions in doing so for the sake of transparency and predictability.
Manufacturers & Factories – Garments, shoes, bags, etc.
Manufacturing is where your products take shape. There can be a bit of overlap between manufacturers, suppliers, and raw goods sources as some companies vertically integrate and bring operations under one umbrella. But more often than not, your manufacturing links will be more spread out. Just as a raw material supplier can have multiple sources, most brands will need contingencies for manufacturing as well, often expanding their chain to include multiple factories, sometimes across multiple countries.
Distribution – Logistics, retailers, etc.
Your supply chain’s distribution link is where your manufactured products are delivered to your various retail partners. Logistics is a complicated business, and proper tracking and management are crucial at this stage. Having a system in place to provide full tracking and accountability at every step of the way can help to prevent unfortunate delays or losses. Having a comprehensive tracking system in place and open communication with your shipping partners is more critical than ever as ongoing shipping delays due to the current pandemic(article link) continue to impact supply chains worldwide.
Retailers – Brick & mortar stores, online sellers
The retail partners—or the retail arm of your business—provides the customer-facing aspect of your supply chain. This is where your customers will buy your products, be it a physical store or an online marketplace. Some brands will only sell products through their stores while others partner with large department stores or sell exclusive retail rights to niche shops. Either way, most will have multiple locations that rely on timely deliveries. Communication is vital here to be able to track inventory and predict future fulfillment needs.