Which Factors have an Effect on the Supply Chain?

If you are considering to develop your supply chain you need to have a look at some of the significant factors that can affect it. These factors are discussed below-

The geographic location and the transport decisions

Some of the most important factors that are required to determine a supply chain are the locations of the plants where the products are being produced or manufactured, the location of the warehouses, and the location of the various distribution centers. These factors also have a huge impact on the cost and the revenue as well as the level of service that is being provided to the consumers. With this, the mode of transport should also be determined, and it too affects the supply chain. This is because it involves the cost factor. Like transporting though air may be costly as compared to transporting through rail or ship.

The product type

This is one of the most important factors that affect the supply chain. Now here there is one thing to note which the supply chain of the solid end products is will differ from the supply chain of the liquid end products. For instance, if the ice cream has to supplied, then the supply chain of the ice cream should be such that there is the availability of the cold storage to ensure that it is in the sub-zero temperature throughout the supply chain process.

Production decisions

Now the products decisions include several things like which type of products have to be produced, which kind of plants will be used to produce those products, scheduling production, etc. all of these play a crucial role in coming to a final production decision.

Inventory control

The inventories to are one of the most important aspects of the supply chain. The inventories include things like the raw material, the semi-finished goods, and even the finished goods. Having proper management of inventory control is essential. This is because it will greatly impact the cost of production which in turn will affect productivity. One needs to have a properly managed inventory so that there is no shortage or excess of the inventory during the production process.

The various strategies for distribution of the product

This is yet another important factor that affects the supply chain management plan. One needs to come with the best distribution strategy for their product that is being manufactured. The main focus of the distribution strategy is on the connection that has to be established between the suppliers and the warehouse managers. One of the primary aims of the supply chain management is to focus on ways in which the distribution strategies can be improved from time to time so that the overall supply chain management can be optimized I a proper manner.


Thus above are all of those factors that affect the supply chain and therefore should be taken care of stock.

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Anum Yoon is the founder and editor of Current on Currency. She loves all things personal finance, which is why you'll find her work all over the PF blogosphere.

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