What will my supply chain look like in 10 years? This is a question that many business owners ask themselves as they strive to increase their profits. Increasing profits is key for a company that wants to stay competitive. One way that companies can increase their profits is through better product quality and lower pricing. While these things are important, the biggest factor that will have the greatest impact on your profit margin is the way that your supply chains function.
In order to answer the question; what will my supply chain look like in 10 years? you first need to understand how supply chains work. Supply chains are a detailed method of how a business acquires raw materials, processes the materials to make goods, and then provides the goods to customers. The entire process takes time and costs money. Let’s take a look at this process in a little more detail.
How does factories obtain raw materials? For starters, they may seek out qualified workers to bid on the job. Once they receive proposals, they sort through them all and choose the highest paying. Then they transport the materials to the plant. Workers transport the materials to the plant in boxes and crates.
Once the material is at the plant, it must be converted into a finished product. This process typically requires energy, machinery, and space. Machines can speed up this process and lower the cost per material, while increasing production efficiency. Meanwhile, human labor simply means more time available to do the actual work of converting the material into the finished product.
How do you maintain economies of scale in the face of these costs? You do this by finding the cheapest providers of materials. Many plants are able to acquire the same or better quality materials than they could previously for less money. They then pass the savings they obtained on to their customers.
What will my supply chain look like in this scenario? It will continue to be cost effective. Each unit of material is purchased from the lowest bidder, cutting costs across the board. Some units will continue to use existing material acquisitions at a slightly higher rate to reduce cost while maintaining efficiency. This cycle continues until all materials are purchased and used in the final product.
How will my supply chain look like if I start up a manufacturing business that produces its own products? In this case, you will produce goods in your factory that enter the supply chain after they have been completed. The items go directly from the factory to your customers. In most cases, you would have created a production facility as well as a processing facility to handle the raw materials and the finished products. You will continue to use your existing plants for materials storage and warehousing.
What will my supply chain look like in a scenario where I outsource production? In most cases, an outside source will handle all of the material procurement and manufacturing aspects of the project. This means that you would no longer need to store material and handle the shipping of it to your customers. Instead, you would hire workers who will purchase the material at a wholesale price and then package and ship it to your customers themselves.
What will my supply chain look like in a scenario where I construct multiple factories? Here, you will be assuming the role of the entire production staff for each factory. You will be responsible for hiring your own employees and providing them with the tools they need to do their job. You will also have to maintain your factories properly so that they continue to operate at peak levels. You will need to ensure that your machinery is kept in good working order and that your facilities are kept up to code.
What will my supply chain look like in real life? Unfortunately, this answer is not quite so simple. In order to accurately simulate a manufacturing operation, you must first consider all of the variables that will be involved. For example, how long will it take to deliver each product from raw materials to finished goods? How long will it take to complete each factory process, such as pouring liquids into mold containers or preparing metals for shipment?
While it may be tempting to try to answer the question “what will my supply chain look like in real life” with a hypothetical scenario, answering the question in this way is risky because you are really no knowing what will occur. It is best to stick to a more concrete description of what will happen in order to better prepare yourself for what is going to occur in the real world. This way, you will know ahead of time what will be necessary for you to do. In addition, knowing how your production will function and what you need to have in place beforehand will help you anticipate any issues that may arise.