An upstream supply chain covers the function from raw material procurement to manufacturing of the final product. The basic blueprint goes like this – management first looks for raw material suppliers, which, when received, are utilized during the production cycle. The processes which are involved in the upstream value chain are supplier selection, procurement, and inventory management. When an upstream chain framework is very well thought out and executed, then a company will have stable, efficient, uninterrupted production flow and, of course, a terrific supplier relationship, which, in the face of fluctuating demands, will keep up with the rising demand for raw materials.
With upstream operation containing direct involvement of suppliers, raw material, and transport that makes the accessibility of all functions possible, it is worth highlighting that any retrograde effect on any said process will disrupt normal functioning. Any bottleneck ranging from natural disasters to unrest in international trade, from rising prices to workforce strikes, anything from man-made to natural instances that hinder the flow of resources, will eventually trickle down to production delays and inventory issues. With the mention of inventory issues, it is also worth noticing that overstocking or understocking raw materials will directly impact production efficiency and customer service levels.
Technically, making up for the ground zero of the value chain, the upstream supply chain needs utmost care as it sets the tone for everything else to follow. For an efficient flow of action, management can ensure a diverse supplier base, reducing dependency on one single point of contact, more so in the face of seasonal demand. The other thing SCM should invest in is the AI and ML-based software. This will not only boost operational pedigree but also provide much-required visibility with robust decision-making.
The value chain leg of distributing the finished product to consumers is covered under the downstream process. Operations from distribution, order fulfillment, and last-mile logistics are integral to the downstream chain and essential to driving peak customer retention levels, day-in, day-out. Not to mention that the aforementioned half of the titular activity is, by default, adaptive to ever-changing user demands and preferences and relies on a wide array of distributors and retailers to reach the target group.
In addition to the customer-first approach, a downstream supply chain streamlines the framework, focuses on delivery speeds, maximizes order fulfillment, and opens up avenues for more responsive inventory management to avoid overstock and understock situations.
As you might have figured out by now, the downstream value chain's key focus is ensuring the timely delivery of the finished products to its end target customer base. Which means that key performance indicator contributing to visibility and coordination of the distributor network to ensure successful delivery rates and in few cases reverse transaction too, is necessary. So, in a nutshell, leadership can say that their main challenge is to keep up with the ever-increasing customer expectations of quicker order processing with multiple delivery options (such as last-mile delivery).
With many of the downstream functions involving storage and transportation, leadership should look to invest in warehouse automation tech that enables the stakeholders to manage the stock much more accurately. To keep the order rate intact, OMS (Order Management System) is another virtue that the SCM can infuse, minimizing workflow errors. And, with the same-day delivery concept gaining traction every day, an intelligent transport management system is the way to go ahead.
When viewed collectively, three important pillars are pivotal in managing the supply chain upstream and downstream. Some of the flows go parallel, in ascending or descending, or tandem order.
So, there you have it. An overview of how upstream and downstream supply chains collectively form the backbone of a solidified process. Not only does it ensure seamless optimization of the many functions involved, but metrics of efficiency, productivity, and reaction time in the face of an untimely disruption all benefit greatly.
How is data at security risk in the supply chain industry?
Almost every function churns out vast sets of information daily, and these repository, when left unsecured, can be problematic for the company. The importance of data security stems from the fact that from every logistic application to the IoT device involved, there are streams of intelligence running concurrently, highlighting the over-reliance on information and its timely usage. Since logistics functions require real-time feed for tracking devices onboard, the tech at work remains equally vulnerable to disruptions and possible theft.
To understand the implications of the recent order by the US govt., let us first put the spotlight on how data and its safety are handled in the value chain industry.
When SCM designs the security framework for information and its usage, there are three vital components that are kept in mind. These are data confidentiality, integrity, and availability. An IT section of an organization ensures that whatever laws are being applied adhere to the pillars mentioned above as it helps prevent unauthorized access, transfer of sensitive info, and any unwarranted changes. However, when it comes to constant monitoring and daily utilization, quite a few measures have to be kept in mind for efficient usage and utmost compliance.
Now, with the management’s role defined, it brings us to the context of this write-up on how the limited transfer of US audience data will disrupt the global supply chain operations. While the subsequent impact will be visible in the time to come, leaders across the globe have analyzed the crucial pillars of value chain functioning that stand to be affected.
The change in the recent data law will surely push conglomerates to the avenues of adaptability. Leading to smart innovation, which, when backed, can be infinitely rewarding to the supply chain industry. All that now remains to be seen is how the industry aces the challenge on hand.
Ever since the inculcation of an insight-based framework powered by AI and ML platforms, the challenges of the pharmaceutical value chain have been better handled with more resilient workflows. Supply chain management is now far better equipped not only to handle bottlenecks but also to make the most of market opportunities.
It’s fair to say that when it comes to consumers, a faultless pharma supply chain functioning is a necessity. With the entire world dependent on it for its well-being, it is a must for both SCM and government officials to ensure that challenges are sorted out timely through smart collaboration and the infusion of technology in end-to-end value chain functions.
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