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International Forwarding Association Blog » International freight forwarding » Supply chain management
Supply chain management

Supply chain management

Supply chains cover the entire movement of the goods to the customers and include the transport and storage of the raw materials, as well as the forwarding and storage of the ready products. The International freight forwarders work together for creating interconnected networks for product supply and delivery which are in demand by the end customers of each supply chain.

 

Definition for supply chain management

The definition of this type of management includes the planning, the implementation and control of all activities in the supply chain. The goal is to create a competitive infrastructure for the international freight services and to synchronize demand and supply.

 

 

Management components

The management of chain supply offered by the freight forwarders includes the following components:

  • Planning and control
  • Work infrastructure
  • Organizational infrastructure
  • Structuring the product flow
  • Structuring the information flow
  • Storage
  • Reverse logistics
  • Managerial methods
  • Risks and rewards

We will take a closer look at two of the main components – storage and reverse logistics. Storage has its own specifics which is why freight forwarders Europe offer storage space for various types of goods, with all of the necessary maintenance equipment and optimized conditions for inventory tracking. Reverse logistics is associated with the return and customer care policies of the companies for the return of goods after purchase if the customers are not satisfied with their quality. This type of logistics service is an inseparable part of the services provided by the member companies of the European network for logistics.

Storage

The storage of goods is done mainly in big warehouses in industrial areas. They are equipped with loading and unloading facilities. An optimization of the supply chain provided by international freight forwarding is achieved via these storage services. They allow for storage of goods until a full container load is ready to be forwarded. The warehouses can also be used for storing large volumes of products such as wine and cheese which need to age and ripen before reaching the customers.

Reverse logistics

Reverse logistics is the management of the return of products. Every time when money is taken from the company’s reserve this is a reverse logistics operation. It includes the management of the return of goods from the store back to the warehouse and then their destruction or return to the supplier for a refund or for a replacement. Reverse logistics is also part of the supply chain.

The new supply chain model

The new model which is gaining popularity on a global level includes the following basic principles:

  • The sole unit which invests money in the chain supply is the end customer.
  • The only sustainable solution is to determine which part of the supply chain from the supply of raw materials to the delivery to the end customer is profitable for the business.
  • Apart from the economic value, the overall product content is also taken into consideration.

Despite the introduction of state-of-the-art technologies, such as tracking systems as well as mobile apps and sensors, the physical forwarding and distribution of the products are still the basic elements of the supply chain management.

The management includes three main sectors:

  • Link management
  • Material flow management
  • Information flow management