In the present day and age, everyone is pressing for higher efficiency. To achieve this, every link in the supply chain needs to be managed efficiently.
The end to end supply chain model provides a much more effective way of managing the entire supply chain given these constraints. It covers every step in creating and delivering a product, from sourcing raw materials to getting the final product to the customer.
This approach gives businesses full control and visibility over their supply chain, helping them track, plan, and optimize each stage. So much so that evidence now suggests that 79% of companies have boosted their revenue through an efficient supply chain process.
So, in this article we explore the end-to-end supply chain process. To do so, we define the term and outline its key benefits.
What Is End-to-End Visibility in Supply Chain?
End to end supply chain, also known as “e2e” is the process of consolidating all steps of a company’s logistics process in a centralized manner. Thus, when talking about end-to-end supply chain, we refer to a system that includes each process involved in the forward and reverse flow of goods needed to make a product—from procurement of raw materials to delivery to the final consumer. Simply put, it is the collection of all needed steps to take a product to its end consumer. This way of managing supply chain activities ensures that every part of the supply chain works smoothly.
Think, for example, consider a smartphone manufacturer. Their end to end process begins with sourcing raw materials like metals and electronic components. Next, these materials are sent to factories around the world to be assembled into crucial components. Such components, in turn, are brought to an assembly line where they are put together to make the phone. Once the smartphones are produced, they are transported to warehouses and distributed to retailers or directly to customers. Multiple steps to bring a product from end to end.
End to End Supply Chain Process
End-to-end supply chain management addresses the entire ongoing process to make a product, from getting raw materials to delivering finished goods to consumers. This covers essential stages such as buying, production, warehousing, movement, marketing, service delivery, and follow-up.
Here’s a breakdown of key components of an e2e supply chain process.
Supply Chain Planning: Creating a careful plan of supply chain activities to achieve organizational goals and missions.
Demand Planning: Accurately forecasting the needs of customers to meet their demands on the supply side.
Source Procurement: It involves finding and managing suppliers of raw materials or finished products.
Purchasing Procurement: The contracting or acquiring of resources mainly through formal or legal processes.
Product Manufacturing: The ability to produce end products with a good process flow that efficiently transforms raw materials into finished goods.
Warehouse Inventory: The process of keeping an up to date list of all the products and raw materials in your possession.
Delivery and Transportation: Transporting products to dealers or directly to the consumers, depending on your distribution strategy.
Customer Service: Indirect customer communication including receiving inquiries, returns, and providing after-sales support.
Supply Chain Optimization: On-going process improvement to increase productivity and decrease expenses.
When Does the Supply Chain End? 5 Stages From Start to Finish
E2e supply chain processes end when a product or service has been provided to the customer and all servicing actions, if needed, are finalized. However, the exact endpoint depends on your business model.
Regardless of the precise endpoint, all end to end supply chains tend to follow the following process:
Procurement
The first stage involves acquiring the necessary raw material inputs from the supply entity for manufacturing or assembling a product. Supplier relations are critical factors for guaranteeing the availability of high-quality raw materials and better rates.
Manufacturing
After obtaining materials from different sources they undergo processing to produce the final product. This stage entails organizing a timeline, employee management, and quality checks.
Logistics and Transportation
Then, once a product is finalized, it is moved from manufacturing plants to either a warehouse for safe storage or to a retailer for an eventual sale.
Warehousing and Inventory Management
After transportation, products are typically stocked in storehouses or warehouses to manage demand and supply according to changing consumer patterns.
Distribution and Sales
Once products are warehoused, they are moved to retail locations or sent directly to a customer, through online markets, thus putting an end to the process.
5 Benefits of End-to-End Supply Chain
End-to-end supply chain visibility gives an incredible edge to business organizations. In other words, it fosters efficiency in operations, effectiveness in decision, and satisfaction among customers.
While there are countless benefits to adoption an e2e strategy, here are some of the top benefits:
1. Improves Efficiency
Implementation of these processes leads to an increase in throughput and a possible decrease in elapsed time by decreasing waste at various points and reducing wait times due to miscommunication.
2. Lower Costs
By increasing the efficiency of companies, e2e supply chains often result in cost reductions by eliminating unnecessary expenses.
3. Improves Productivity
Real-time tracking and automation practices allows operators to emphasize the activities with the most value for a team, while cutting down on inefficient steps of a supply chain, thus improving productivity.
4. Improves Inventory Management
By having a clear view of delivery times and carrier performance, companies can significantly reduce their safety stock—the stock needed to respond to an external shock—thus minimizing additional costs to keep stock levels high.
5. Boosts Customer Satisfaction
Since e2e supply chains shorten delivery times and increase service levels, customers’ satisfaction often increases due to faster deliveries and lower costs.
Ways to Optimize Your Supply Chain
As we've seen in this article, end-to-end supply chain management can be defined as the process of increasing your company’s efficiencies and minimizing costs through gaining a centralized control over your supply chain links. So, it is always important that you take time to properly examine your supply chain to come up with ways to enhance its performance.
There are countless ways to do so. But, we do want to highlight some common practices you can take to improve a supply chain:
Utilizing Advanced Tools
As much as possible, use data analysis to predict demand, control the supply, and determine the reasons for port congestion.
Focusing on Collaboration
Improve communication to and from suppliers, manufacturers, and logistics transporters, for efficiency.
Implementing Automation
Some of the workflows you can streamline though automation include order processing, management, and tracking of inventory as this would be time-consuming if done manually.
Enhancing Visibility
Make sure you have complete visibility of your operations to identify inefficiencies and make accurate plans. New technologies should support real-time analytics of the supply chain process for better and quicker decision-making.
End to End Supply Chain vs Traditional Supply Chain
In traditional supply chains, the most common process followed is known as “the linear model” in which every link works independently. Suppliers, manufacturers, distributors, and retailers perform their tasks separately, leading to miscommunication risks and delivery challenges. Meaning, each part of production works independently.
Thus, in conventional supply chain systems, manufacturing companies often miscalculate the demand due to outdated or incomplete information, resulting in high investment in stock.
An end to end supply chain, on the other hand, centralizes all the areas of procurement, production, distribution, and customer service. It involves digitalization to achieve real-time monitoring.
As a result, in end-to-end manufacturing, supply chain processes optimize the management of raw materials, monitoring of production schedule, and ability to respond to demand variation in real-time. This makes it possible for the companies to cut costs, avoid waste, and improve customer satisfaction.
Final Thoughts
An end-to-end supply chain model connects every step of your operations to ensure products arrive on time, in good condition, and at the right cost. It not only offers clear delivery schedules but optimizes the supply chain, ultimately improving distribution and driving customer satisfaction.
With today’s advanced technology and digital logistics platforms like Desteia, you can also monitor your supply chain in real time and reduce manual tracking through powerful insights and timely alerts. These platforms provide item-level visibility to help you track individual items throughout the supply chain to improve efficiency.
For more insights on how Desteia can transform your supply chain, check out our content.
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