Written by: Kyle Huge

Recently, Students of Courtney Pham’s Principles of Marketing class (MKT 350) had the opportunity to hear from William Barrentine on the details of supply chain management. William’s work as the Vice President of Sales of Grocery and Foodservice gave valuable insight into the workings of Supply Chain Management, a section of Distribution which deals with the movement a goods from allocation of supplies to consumption of the final product.

It helps to think of the supply chain, like a system of conveyer belts in a factory, with many different stops along the way, where new parts are added to a final product. In the supply chain, there are countless conveyer belts for each component in a final product, that culminates in getting all components to the same location. One aspect of the supply chain is that you must consider the production and costs of the things used to create the “conveyer belts”. This means that not only will a supply chain involve making a sandwich and moving and creating its ingredients, but also the creation of the tools to produce it.

During the lecture, Barrentine spoke on the immense interconnectivity of supply chains. In just one of the sandwiches that his company produces there are dozens of ingredients that are all part of a supply chain. Each component has its own processes that require countless supplies and energy to produce. Energy is key in supply chain management. One ingredient in the making of a product such as the grain in a sandwich, could utilize thousands of tons of water. Energy is needed to move the grain, water the grain, and provide storage for it. Many of these functions are done by the company to keep costs low. The smaller the company, the more that it will need to outsource. A large firm can afford to create facilities to perform the functions needed. The more that is needed to outsource, the more a firm relies on marketing channels. A marketing channel is the pathway of a product from when it is made to when it is bought by the customer.

Logistics management is the part of the supply chain which deals mainly with the physical movement of products from one end of the supply chain to another. It deals with order entry, administration, transportation, storage, and inventory management. The most expensive of these functions is transportation.

One of the most important things to remember in supply chain management and in business, is that businesses cannot just absorb the cost of something. If a business needs to spend 20 million dollars on a cost, that’s 20 million dollars that the company does not have. Bigger businesses may not necessarily have more leeway with this, because the result remains the same. A big corporation will have to spend more to cover the costs that a small company will have to spend 20 million on.