Question

Explain Service Supply Chain and how would you offer services with the product to your customers. Your answer must include one of these 3 product groups (not the product that your use in your team project) as example (canned food or snacks from the Philippines: organic tea or coffee from India; fresh produce from Mexico) in your answer.

Answer 1

Ans

The service supply chain is the part of the supply chain dedicated to providing service on products. It addresses the supply of parts, materials, personnel and services needed to provide timely and effective product service, such as repair and maintenance.

Supply chain models and simulations in SCM Globe are composed of just four types of entities: PRODUCTS; FACILITIES; VEHICLES; ROUTES. These entities relate to each other and their interactions are what drive supply operations and produce the simulation results.

The 6 supply chain models are:

• The continuous flow models.
• The fast chain models.
• The efficient chain models.
• The custom configured model.
• The agile model.
• The flexible model.

Specifically in the manufacturing industry, supply chain design requires a great deal of focus on physical product and a broader supplier base. Service firms, on the other hand, typically have little need for physical inputs other than office supplies, and often work with a much smaller group of suppliers.

Both the service and the manufacturing industries require various inputs to complete the processing necessary to satisfy their promise to the end customer. For both manufacturing and service industries, the biggest input is labor. Additionally, companies in both industries require inputs from suppliers of various types – suppliers of goods, raw materials, packaging and so on. Around 70 percent of products are made from procured-in content, reports the lifecycle management company Upchain.

Finally, both industries require capital investment in equipment that allows their employees to do their work.

The primary difference is that most of the cost of manufacturing labor is involved in procuring, transporting and manipulating physical material, while almost all service industry labor is expended on manipulating information and developing relationships, reports the strategic marketing company Griffin and Co. Because of this difference, capital investments in machinery and equipment are typically much higher in the manufacturing industry.

Supply Chain Logistics

Traditional manufacturing supply chain management focuses on logistics in terms of moving physical material from one location to another. The size and weight of objects being shipped and the distance from the supplier to the manufacturing facility can play a major role in the cost of the product.

In service organizations, particularly in the financial sectors, these factors are irrelevant because no physical product is moving except perhaps a few sheets of paper. While the manufacturing industry tries to negotiate better shipping rates and fill containers with product to reduce unit cost, the service industry upgrades servers and installs new software to speed the flow of communication, thereby reducing the labor costs necessary to produce a finished product.

Finished Goods

Traditionally, a finished good is a product that has been completely transformed from a raw material form to a form that is ready to sell to the customer. It's a physical unit that has been assembled, tested and packaged, and is now sitting on a shelf at a warehouse or a store, ready to be sold.

In the supply chain for services, a finished good equals a closed file. The loan has been booked, the home sale has closed, or the class has been completed, leaving no physical evidence except a few sheets of paper. However, the goal of either finished product is a customer who is satisfied with the product or service she paid for.

Supply Chain Examples of Optimization

In a manufacturing organization, optimization of the supply chain is accomplished primarily by improving speed of delivery and reducing cost. Companies work to reduce physical bottlenecks and inventory, and negotiate better pricing on raw materials. The main way to speed production is to find a faster way to move or manipulate the components.

The main drivers of optimization in a service model, on the other hand, are relationships and information flow. By building partnerships with companies whose strengths complement its own, a corporation can reduce costs. By eliminating virtual bottlenecks caused by duplicate approval loops or other intangible delays, a service company can realize the same goal as the manufacturing company: a lower-cost finished product, delivered to the customer more quickly.