Downstream supply chain
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Downstream supply chain management focuses on the activities involved in delivering finished goods to the end customer. This includes order fulfillment, distribution, warehousing, and transportation. It encompasses the coordination of goods, information, and finances from the final customer back to the original supplier. It also covers activities such as returns, customer service and after-sales support. The goal of downstream supply chain management is to reduce cost, maximize customer satisfaction, and maintain a competitive edge.
Example of downstream supply chain
- Manufacturer > Distributor > Retailer > Consumer: In this example, the manufacturer produces the goods and then supplies them to the distributor, who then supplies them to the retailer, who then sells them to the consumer. This type of supply chain is common in most industries.
- Manufacturer > Wholesaler > Retailer > Consumer: In this example, the manufacturer produces the goods and then supplies them to the wholesaler, who then supplies them to the retailer, who then sells them to the consumer. This type of supply chain is more common in the food and beverage industry.
- Manufacturer > Warehouse > Distributor > Retailer > Consumer: In this example, the manufacturer produces the goods and then stores them in a warehouse. The warehouse supplies the goods to the distributor, who then supplies them to the retailer, who then sells them to the consumer. This type of supply chain is more common in the automotive industry.
- Manufacturer > Third-Party Logistics (3PL) > Distributor > Retailer > Consumer: In this example, the manufacturer produces the goods and then supplies them to a 3PL provider, who then takes care of all the logistics of getting the goods to the distributor. The distributor then supplies them to the retailer, who then sells them to the consumer. This type of supply chain is more common in the electronics industry.
Types of downstream supply chain
Downstream supply chain management includes a variety of activities that ensure goods are delivered to the end customer. These activities can be broken down into the following key types:
- Order Fulfillment: This is the process of receiving, processing, and shipping customer orders. It includes order tracking, inventory management, and customer communication. It is the foundation of a successful downstream supply chain.
- Distribution: This is the process of getting the goods from the supplier to the customer. It includes distribution channels such as wholesalers, retailers, and e-commerce platforms.
- Warehousing: This is the process of storing goods in a secure and efficient manner. It includes the management of inventory, space utilization, and supply chain optimization.
- Transportation: This is the process of moving goods from the supplier to the customer. It includes various types of carriers such as truck, rail, air, and ocean freight.
- Returns: This is the process of managing customer returns and ensuring that goods are returned to the supplier in a timely manner.
- Customer Service: This is the process of providing customer support and assistance. It includes answering customer inquiries, resolving customer complaints, and providing timely responses.
- After-sales Support: This is the process of providing support and assistance to customers after they have purchased a product or service. It includes product upgrades, warranties, and customer loyalty programs.
Suggested literature
- Vachon, S., & Klassen, R. D. (2006). Extending green practices across the supply chain: the impact of upstream and downstream integration. International journal of operations & Production Management, 26(7), 795-821.
