When supply chain managers compare notes, the talk will eventually get round to “the perfect order”. That’s an order which reached the customer complete, in the right place, undamaged and on time. Like other manifestations of perfection, it is not as common as some companies would like. Lower-than-necessary perfect order rates not only create unhappy customers, but suggest supply chain inefficiencies that are costing the company money. So attention to the supply chain has moved out of warehouses and loading bays and into Mahogany Row.
The supply chain is made up of the physical and information links between suppliers and the company on one side, and the company and its customers on the other. It includes production planning, purchasing, materials handling and, under the subset of ‘logistics’, transport and storage (warehouses and distribution centres). Though companies used to think of the supply side and the demand (customer) side as two separate strands, today they increasingly regard them, and manage them, as one continuous chain. For many years, it was the chain from their suppliers that preoccupied manufacturers most. The route to the customer was the distribution channel[link to ‘channel management’], a problem that belonged to a different part of the company.
