In the world of contract manufacturing and production on behalf of Clients, the **supply chain **represents a set of companies that acquire and provide the necessary inputs for the provision of the production service to the Client.
The most common and essential inputs are certainly production materials such as raw materials, components, parts that make up the packaging, packaging materials, etc. However, in recent times, the concept of supply chain has also been extended to intangible inputs, which sometimesa are equally as essential for the performance or completion of production and logistics processes. These inputs can consist of specific services provided by third parties or even information and data to be used during production throughout the entire contract manufacturing process.
The reference to a chain is by no means causal, but rather aims to highlight the link that exists between various actors in the supply chain and the company managing the supply chain as its source of supply.
Let's imagine the most typical scenario of industrial contract manufacturing for third parties: the assembly process, the quality control process and the delivery to destination of a finished product designed by a Client company.
To proceed with the assembly, it is necessary that all the production inputs are available. For this to happen, it is necessary to start the process of planning and purchasing materials and raw materials considering various factors, for example the so-called lead time or time necessary for delivery, due to their relevance to global manufacturing project schedule. In this phase there are several companies that are in charge of providing production inputs, from raw materials to personalized packaging. Each company or group of companies constitutes a real link in the supply chain, within which it plays a complementary role:
only the fluid cooperation of the entire chain guarantees a good development of manufacturing process
The supply chain does not end with the purchase of raw materials, but continues throughout the supply process and involves inbound and outbound logistics. Transport to destination is often time a very understimated activity but should be really taken care of in the right way. Inbound logistics, instead, deals with the receipt of inputs at the operational headquarters where production will begin and can be considered a strategic ancellary service to the manufacturing process.
From a certain perspective, it is still possible to expand the supply chain domain to include any services provided by third parties to test or certify the product obtained as a result of the assembly process. Again, with this in mind, any service related to outbound logistics and performed not directly by the production partner but by third-party companies (e.g. carriers) can be considered an integral part of the supply chain, as a proper link that contributes to the supply of the complete contract manufacturing service provided to third parties.
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