What is a supply chain?
A supply chain is a set of strategic activities or processes that enable an organization to deliver a product or service to the customer or end-user effectively.
Supply chain management provides a set of tools, from the production process to the point at which the product is sold. An effective supply chain takes into account the following factors:
- Transportation management and control
- Calculation of the production process
- Location determination
- Calculation of scales in the warehouse and in accounting
- Additional customer information
Supply Chain Phases:
Within the supply chain, a transformed product is taken from raw materials to delivery to the final consumer, guaranteeing delivery in time and form. To complete the steps of a correct process, it is necessary to know the different activities such as purchasing, supply, stock management, transportation, maintenance, among others.
Supply chains include a combination of raw materials, component suppliers, consumers, retailers, wholesalers, manufacturers, and distributors, which make up the entire production process.
Although the supply chain is usually always according to the nature of the company, it is possible to classify its elements according to the stage of the production process. In this way, we can speak of the three main stages of the entire supply chain:
- Supply is responsible for where raw materials are acquired, their storage, mobilization, and what criteria are used in their selection.
- Manufacturing is the process of converting these raw materials into finished products, which generally require energy, labor, coordination, capital, etc.
- Distribution is the stage where the final product is delivered to traders, where complex transportation networks and economic contracts often interfere.
- Each of these stages is connected to others through the flow of material, capital, or information, and, in some cases, these three stages may not always exist, and some may be outsourced.
Logistics within Supply Chains
Logistics is part of the supply chain and is an area focused on the storage, transportation and distribution of products, in other words, it is part of the supply chain that includes the management of the warehouse and the internal and external cargo flows from sourcing to final delivery.
Therefore, logistics is an area of business activity responsible for delivering the right product to the right destination at the agreed time, in the specified quantity, at the specified cost, with the required quality, always taking care to comply with the conditions agreed with the customer.
To meet the objective of seeking customer satisfaction through error-free order management, it is necessary to perform actions such as:
- Order processing: Refers to the receipt, acceptance, verification and transmission of purchase orders and/or orders.
- Material handling: It determines the means where the product will be handled either in the warehouse or at the point of sale, an example would be conveyor belts, forklifts, among others.
- Packaging: This is the material that protects and preserves the product so that it reaches its final destination in good condition. It can be plastic, paper, cardboard or wooden boxes, etc.
- Transportation of the merchandise: It is the means of transport in which the products will travel (railroad, airplane, ship, trucks, etc) by different means such as sea, land or air; the routes are established prior to taking the product to its destination.
- Storage: It is the place where the product is safely stored. Within the storage the location is selected, its dimension and the way it will be (refrigeration, automation, etc.) depending on the type of product.
- Inventory control: It is a system that facilitates the seller to verify the availability and existence of a product, so that it can reach its consumers.
- Customer service: The services and material means and people that will attend the clientele at the moment the product is acquired are established.
The main objective of the supply chain is to provide the items and materials in the required quantity, quality and time at the lowest possible cost. And logistics has the objective of satisfying the customer’s needs. Both objectives together can achieve a competitive advantage to the company.
Supply chain management involves product innovation and development, purchasing and sourcing, manufacturing and operations, supply and distribution, customer service and global facilities.
Supply Chain in Mexico
In Mexico, nine out of ten companies know that logistics and supply chain management are key factors in the results. According to a recent study conducted by GS1, Logística de México and EGADE Business School of the Tecnológico de Monterrey called “The Supply Chain as a Competitiveness Engine”, seeks to determine the impact of the chain on business competitiveness and the analysis of opinions of the organizations surveyed to determine different factors driving knowledge on these issues.
Similarly, after the approval of the Mexico-United States-Canada Agreement (T-MEC) and the closure of a large number of manufacturing plants in China, Mexico has positioned itself as one of the most attractive countries for investment.
Other significant reasons that motivate foreign countries to look to Mexico are its strategic geographic location, lower labor costs, logistical connectivity with the US and Canada, as well as international agreements with the main economic areas of the world, making Mexico the main exporting power in Latin America.
Mexico is beginning to position itself among the most advanced economies in the world, generating a great diversity of opportunities in the short, medium and long term.
If your company is in the logistics sector and is looking for a warehouse or industrial building, leaving aside barriers that may obstruct a project VYNMSA is the best option for your company. When it comes to logistics and taking your company to the next level with projects related to the country’s real estate scene, VYNMSA is the best option.
If your enterprise is searching to be promoted and go deeper into manufacturing looking for a new industrial space, VYNMSA has approximately 30 years of experience and has delivered more than 450 projects to international clients. We are one of the main real estate industrial developers in Mexico. We also have the expertise and know-how to develop your projects tailor-made or Build-To-Suit. Likewise, we work actively with industrial brokers as business partners and have around 20 inventory buildings ready to be occupied immediately, which add up to a total space of 1.7 million square feet in the Northeast and in the Bajio region.
Contact us and discover why VYNMSA is your best business partner in industrial real estate in Mexico.