Just about every enterprise is a supply chain enterprise

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I and ten million people in Manila have the same problem every day. Mobile phone reception—it’s lousy.

It would take several tries to call someone on my mobile phone and when I do, chances are the conversation would stop in the middle.

Poor cellular reception is a norm in the Philippines. It’s just so hard to get a decent signal to have a continuous conversation or get a text out.

I’m sure telecom companies are doing all they could to improve their services. I see it with their unrelenting investment in the set-up and maintenance of cell-phone towers as they continue to expand coverage and upgrade reception.

If we think about it, the operations of telecom companies have similarities to those enterprises who manufacture and deliver finished products. The good quality mobile phone reception we yearn for is not much unlike the supermarket products in how both are made available to consumers.  In short, both have supply chains.

The supply chain is a model for enterprises that buy raw materials and produce & deliver merchandise for their customers. Supply chain management has become a standard when it comes to managing the inventories and logistics of items, from chemicals to consumer goods.

Supply chains, however, aren’t limited to just physically tangible products. They’re very much applicable to intangible items, such as electricity, health care, and business process outsourcing (BPO) services.

Supply chains follow the flow of products from their start as raw materials to their conversion to merchandise and subsequent delivery to users. Service and utility enterprises also follow a path of conversion and delivery not altogether different from product supply chains.

supply chain for all industries

In manufacturing industries, factories convert raw materials into products.

In non-manufacturing industries, enterprises convert specific problems and issues into finished services. Hospitals treat sick patients.  Call centres handle problems and questions. Telecom companies provide mobile phone receptions resulting in uninterrupted conversations and successful sent messages. Power utility companies make available electricity from energy sources.

But It’s not just relating manufacturing and services. It’s also the logistics behind both.  Whereas manufacturers rely on procurement of materials and logistics for transport and delivery, service enterprises depend on infrastructure and systems to ensure the flow of their operations.

A hospital needs not only ambulances but also the system of managing the dispatch of the ambulances for the assurance of fast turnaround for the benefit to patients needing immediate transport.

One mistake I observe with service companies is that they limit supply chain management to stuff like spare parts and supplies.

A large energy corporation for instance has a supply chain executive whose job is to buy equipment and components. The energy corporation had no structure or strategy when it comes to power conversion and delivery. The energy corporation, hence, had big issues in unreliable power delivery due to poor planning in energy generation and power plant capacities.

The success of a supply chain model starts with its scope. Does the supply chain manager of the enterprise handle the total flow from start (procurement/purchasing), to its conversion (production/service operation), and the logistics operations (transport/delivery/orders processing)? If it misses on any of the aforementioned, chances are the enterprise’s business has a lot of room for improvement.

We consumers want good quality from the things we buy. Not only the merchandise from the store but also from services such as mobile phone reception, electricity at the flick of a switch, and the best health care.

The supply chain model is just as much applicable for intangible services as much as it is for tangible items. Most if not all enterprises have supply chains for what they offer and deliver. We just need to recognise that managing the operations with supply chains in mind can go a long way to bringing excellence and win-win results.

If only the telecom companies can think like this, then maybe we’d get better service with our cell-phones.

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