Understanding your sector
Understanding your sector

Start this free course now. Just create an account and sign in. Enrol and complete the course for a free statement of participation or digital badge if available.

5 Suppliers and the supply chain

Think of a factory making car parts, a bakery producing loaves of bread or even a hospital treating patients. None of them has everything on hand all the time to do its core business and, in at least two of the examples, the process of getting goods or services to the customer does not finish on the premises. You will now look at these examples in more detail.

The factory turning out car parts will have to buy in various raw materials – metals, plastics, glass, etc. – plus the machinery and equipment required to fabricate the higher value parts its customers might want for their cars. The bakery, similarly, will have to obtain flour, salt, eggs, water, fillings such as fruit and meat, and other raw ingredients that can be used to create various baked products. Even the hospital relies upon supplies of many products to perform the various medical functions that it undertakes. These will include specialised machinery and equipment, beds and furnishings, food, drugs and medicines, uniforms and many other items – and that’s before considering things such as blood, serum and replacement body parts!

What links all these examples, however, is that they all rely on supply chains – sequences of suppliers – to furnish them with the raw materials they need to function effectively.

Oxford Dictionaries defines a supply chain as ‘the sequence of processes involved in the production and distribution of a commodity’ (Oxford Dictionaries, 2021). Many supply chains will comprise a variety of organisations, each adding their particular element to the overall mix before the final products – whether these are car parts, bread and cakes, or even the good health of the population – are complete.

Activity 7 Stages in the supply chain

Timing: Allow about 10 minutes

Consider the example of a child’s plastic football. Think about all the stages involved in its production, from raw materials to final sale, and list as many as possible below. The first and the last stages are provided for you.

To use this interactive functionality a free OU account is required. Sign in or register.
Interactive feature not available in single page view (see it in standard view).

Comment

The answer below is not intended to be definitive, just an example. You might have identified more than nine stages – if so, well done. You may also have spotted that the transport necessary to move the plastic and, eventually, the ball from one place to the next are also important stages in the supply chain.

Stage 1 Oil extraction

Stage 2 Refining of oil

Stage 3 Conversion of oil into plastic

Stage 4 Transport to factory

Stage 5 Moulding into ball at factory

Stage 6 Transport to warehouse

Stage 7 Storage in warehouse

Stage 8 Transport to shop

Stage 9 On sale in shop

The supply chain is an important element in the operations of an organisation and paying attention to this will affect an organisation’s overall performance and well-being.

Take your learning further

Making the decision to study can be a big step, which is why you'll want a trusted University. The Open University has 50 years’ experience delivering flexible learning and 170,000 students are studying with us right now. Take a look at all Open University courses.

If you are new to University-level study, we offer two introductory routes to our qualifications. You could either choose to start with an Access module, or a module which allows you to count your previous learning towards an Open University qualification. Read our guide on Where to take your learning next for more information.

Not ready for formal University study? Then browse over 1000 free courses on OpenLearn and sign up to our newsletter to hear about new free courses as they are released.

Every year, thousands of students decide to study with The Open University. With over 120 qualifications, we’ve got the right course for you.

Request an Open University prospectus371