List and discuss the primary flows in a supply chain.

Question

What will be an ideal response?

Answer 1

Supply chains involve three primary flows. The three primary flows of a supply chain are (1) product flows, (2) monetary flows, and (3) information flows. Product flows move from upstream to downstream and are generally unidirectional. Firms bring in raw materials, transform them, and ship them to customers. Reverse logistics, however, occurs when products move up the supply chain (in special cases such as product returns). One of the current trends in managing product flows is lean production.
Monetary flows are unidirectional but move from downstream to upstream. Customers pay retailers, who pay wholesalers, who pay producers, who pay suppliers, and so forth. The final customer pays for all the economic activity in the supply chain. Understanding this fact will help you understand the importance of adding value. Essentially, if the customer is willing to pay more for a core activity, that activity adds value. It is unlikely that a consumer will be willing to pay more for a purse because the producer has an excellent legal department.
Information flows are data flows and are bidirectional. Bidirectional flows move both upstream and downstream in the normal conduct of supply chain commerce. For example, order information comes from customers or flows upstream. Delivery information flows downstream from suppliers to customers at each stage of the supply chain. Many other types of information flow as well.