Want to explain Supply Chain to a non-professional? Send them this awesome video.

July 22, 2013

Want to explain Supply Chain to an average person? Send them this awesome video.

It’s possible some of you have already seen this, but we wanted to share this video for those who haven’t. If you’re a professional who works in Supply Chain in some capacity, you’ve doubtless encountered people at dinner parties or kids’ sports games asking you what you do. And because Supply Chain Management cuts horizontally across a number of different business functions it can be difficult to explain to the layman.

Well we recently stumbled across this video from the W.P. Carey School of Business at Arizona State University that lays out a fundamental definition of Supply Chain so that anyone can understand. Using the example of a bottle of water, the video gives a very basic outline of all the factors that go into a modern day Supply Chain and it shows the basic considerations that Supply Chain Managers think about when they help bring a product to market. Next time someone’s eyes glaze over when you tell them you work in Supply Chain Management, send them this video:

We also like this video because it serves to dispel some commonly held myths about commodities costs and consumer prices. It’s a great video to show anyone who has the misconception that product cost equals material cost. How many times have you heard the “Why does my coffee cost three dollars if the beans themselves only cost ten cents?!” complaint? The beans cost ten cents, but there’s also the cost of the cups, the box to hold the cups, the box to hold the beans, the pallets to hold the boxes, the forklift to carry the pallets, the driver to drive the forklift, the truck, driver and insurance to transport the pallets. Then you have to pay for the facility to roast the beans, the energy for the facility, the labour at the facility, the janitorial and office supplies, and the transportation cost (drivers, fuel, insurance) from the roasting facility to the retail outlets. Then you have the cost of the retail facilities, the equipment and supplies for the retail facilities, the baristas, uniforms for the barista, etc. And the complexities mount with more complex products. Imagine the same considerations except you’re manufacturing a jumbo jet.

Using the example of bottled water, this video provides an excellent, easy-to-understand explanation of the complexity of a modern-day Supply Chain packed with great illustrations.  Check it out!

Anyway, how do you explain Supply Chain to someone who doesn’t understand what it is? Do you have simple explanations or examples? Let us know in the comments!

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