Importance of supply chain management cannot be over emphasized. In the beverage market, this should be a priority issue, because observations and studies have indicated that major supply chain focus has been and continues to be on the final step in the distribution of getting the merchandise to the customer, which takes much time and personnel in most common distribution systems. However, there are other faces that should be addressed.
There should be no argument with the premise that delivery completes the main mission of supply chain systems; however, satisfactory completion can only be realized if all steps in the chain have been effectively and timely executed. This fact has been steadfastly recognized and experienced in recent years in the semi-conductor industry. The impact created by each step prior to distribution was evidence of how the other face can and will destroy the supply chain flow.
From an operations perspective, it is prudent to manage each functional area as a sub-supply chain. It makes logical sense, because final units of merchandise cannot exist unless each area has been thoroughly completed which is the case in all beverage operations.
Research with beverage producers substantiates the fact that the idea of supply chains for each face of the chain have not really been considered. This probably is because it was not considered as an internal part of the overall chain. What this essentially means in beverages is that detailed focus of processing raw materials and ingredients as well as distribution should be treated as sub chains.
It should all start with processing, because each subsequent face must be given the same thorough treatment to effectively contribute to the chain. That is why this approach to the major chain areas is not only essential, but mandatory. Additionally, such new faces should be dealt with in initial negotiations with suppliers and vendors.
Addressing the other faces of the supply chain points out what the age-old planning and scheduling systems did ― detail what needs to be done to avoid future supply chain chaotic conditions (out of stocks, lost sales, no inventory at the terminal point, etc.).
At this point, questions and concerns about supply chain details should be clear. Specific to beverages, the sub-chain idea should and will prevent fallout in execution of responsibilities that currently might exist in each area.
It means clearly setting up the roles to be played by whom, when and to what extent. It also creates an integration among the areas to ensure each new face has successfully provided for the subsequent areas. In reality, the approach, setting up a chain within a chain, enhances the performance of the total supply chain. The focus entails development of a different mindset from what might be referred to as a “conventional” management rational.
Many advantages can be realized with the “other faces” idea. First and foremost is an avoidance criteria that addresses out of stock syndrome. Second is an awareness in the form of a mindset that an accurate and timely input/output flow is mandatory in each chain phase to satisfy the final mission. And finally, an efficient, realistic, productive and cost effective supply chain system is a necessity.
