Flora Collins
A cohesive supply chain requires functional teamwork in unison to avoid any pitfalls and meet consumer demands—every time. It encapsulates many moving parts to operate well in order to ensure efficiency and resilience. Each supply chain partner must be aligned, cost-effective, and have the end goal of getting excellent products into customers’ hands. Everyone must work in tandem to assure quality, and avoid any bottlenecks down-chain.
But who are these key players and what are their roles? Read on to gain a more detailed understanding of the important players in the supply chain.
Manufacturer
A manufacturer, or producer, is usually the first step in the supply chain. They are the ones responsible for creating the products. Manufacturers could be responsible for raw materials– mining for minerals, cutting timber, drilling for gas and oil, or farming animals and plants. Or they could simply utilize these materials to create goods in a factory. In essence, manufacturers supply the items and services utilized by other supply chain partners down the line.
Distributor
A distributor’s main job is to take inventory from manufacturers and deliver them to customers. Distributors typically sell large quantities of products to other businesses and protect supply chain partners from spikes or lulls in product demand by stocking inventory. Distributors also usually do the work of servicing consumer needs. Some distributors are also in charge of warehouse operations, product movement, and inventory management, even going as far as being in charge of customer support and post-sales tasks. Distributors can also only be responsible for brokering products between manufacturers and customers, without ever owning those items.
Logistics Provider
A logistics provider, typically 3PLs or 4PLs, provides services such as product retrieval, storage, warehouse management, shipping orders out to end-consumers, stores, or wherever goods are sold, and sometimes transportation as well. Their main motive is to get products from one place to another within the supply chain.
Like distributors, logistics providers vary in their specialties. Some will only store products, while others will be in charge of all the aforementioned tasks. While 3PLs typically warehouse products or even install equipment, 4PLs contain everything that 3PLs do, while also providing technology integration, tracing, financial services, and order tracking.
Retailer
Once a retailer gets product from their logistics provider, their role is to stock inventory and sell smaller quantities of product to the public. To perform well, retailers must focus on customer trends and preferences, using market research and tools to meet their demographic correctly. This kind of research focuses on product selection, price point, and accessibility to their target customers. Retailers span across every kind of vertical (food and beverage, beauty, clothing, electronics, etc) and can be available on or offline.
Brand
Brands, like retailers, stock inventory to sell in smaller quantities to the public. Some brands are part of a larger entity, like how makeup company AERIN is under the Estee Lauder company. However, individual direct-to-consumer brands don’t typically sell different labels. Rather, a brand will differentiate itself with its name and have separate marketing that isn’t attached to a larger umbrella company. A good example of the difference between a retailer and a brand is Glossier versus Sephora. Though a consumer can buy the makeup brand Glossier at Sephora, it is its unique entity with an exclusive website, stores, and ad campaigns. The retailer, Sephora, on the other hand, sells many different makeup brands.
These five different players in the supply chain are all key to ensuring the product journey functions like a well-oiled machine. Each one adds a unique value proposition to supply chain management, linking together until a customer has a package at their door. But how exactly are they able to accomplish this?
Like many supply chain businesses, technology is paving a path for greater visibility between partners from procurement to doorstep. However, visibility of one’s product is only only one part of this multifaceted journey. Data is the new commodity for many supply chain players when looking to enhance customer satisfaction. From the moment a product is manufactured, stored, ordered, shipped, and possibly returned, data creates a lifecycle for every supply chain partner. It is knowing how to capture that lifecycle that is the most important step for today’s chains.
So, is your business prepared to capture data from every supply chain player?