In business today the competition is not between a company and another company but between supply chains. A supply chain is a network of factories, suppliers, distribution centers, retailers, and warehouses. This is where raw materials are acquired, transformed, produced and also delivered to customers. A supply chain is a dynamic process and involves the constant flow of information, materials, and funds across the many functional areas within and among chain members. The members in the chain need to cooperate with their business partners in order to meet the needs of customers and to be able to maximize profits. Managing the collaboration in a supply chain is a very difficult task because of the involvement of many parties. All these parties have their own objectives and resources.
There is no single authority over all the chain members when it comes to chain supply. Cooperation is made through negotiation and not central management and control. The process which takes place in different stages requires real-time cooperation in the operation and decision-making of the different functional areas, tasks, and organizational boundaries. This is to make sure that they will be able to deal with problems and uncertainties. The focus should be on quick responses and high-quality services will be achieved with cooperation and dynamic formation of supply chains.
Supply chain management in Mexico has become a powerful technique in increasing the responsiveness to the changing business conditions. It also enhances the competitiveness of the businesses. Today there is intense competition and the global economy is increasing. For a company to grow and survive, it should boost its market responsiveness and become cost competitive. Supply chain management is a way of breaking the set of worth producing activities from raw materials down to the consumers of the end product.
A distribution chain will link producers, retailers, customers and providers in the distribution. This aids in delivering and creating goods as a single company of abilities to bring together skills and resources. Supply chain management is a process which transfers information from the manufacturing line of providers to end customers and synchronizes the flow of goods. This synchronizing the business’ procedures and ends in the supply of notices of requirement fluctuations.
Requirement and the significance of supply chain management increases in future. This is because clients will be demanding delivery of orders in a way that is fast. Manufacturers will need to have greater knowledge of order requirements to be able to better plan its operations and processes. Also, the external entities need to increase coordination among the customers, suppliers and service providers. This will guarantee that there are coordination and visibility through the distribution chain.