1.2 From producers to consumers The supply and distribution chains 1. . ....................... and consumers connect through consumers and 6. . ....................... involves 3. . ....................... department planning department supply chain 2. . ....................... chain human resources department purchasing department 4. . ....................... department production department In most economies, the world of production exists in order to satisfy the demand of the market by supplying it with what is requested. This means producers and consumers need to connect, and this happens through the supply and the distribution chains. The supply chain The supply chain is the system of people, resources and activities involved in manufacturing and moving a product from producers to consumers. Its activities involve the transformation of raw materials into finished products, which are then delivered to final consumers. Its different phases are coordinated carefully by the supply chain management in order to bring benefits to the company in terms of: cost reduction, competitive prices, minimum inventory, and productive efficiency. to deliver: consegnare factory: fabbrica in bulk: all ingrosso to purchase: acquistare to recruit: assumere retailer: dettagliante to ship: spedire supply: fornitura wholesaler: grossista 24 indirect The process Here is a simplified version of a supply chain. The first element in the chain are the consumers, who start the process when they decide to purchase a product. If the product is not available, the sales department passes on their request to the planning department which creates a production plan; this involves considering everything that is necessary to manufacture it. The human resources department checks the required workforce is available or recruits it, and the purchasing department orders the with 7. . ....................... warehousing department department 5. . ....................... necessary tools and materials. The materials are then inspected by the quality department and sent to manufacturing, where the production department makes the final product. This is then tested and stored by the warehousing department before being delivered to final consumers by the shipping department. Modern trends Nowadays it often happens that businesses start their production before consumers actually ask for their products. This is because companies do extensive research in order to know the market and predict its trends, and anticipating production allows them both to be ready to satisfy the demand as soon as it emerges, and to better plan their periodical activity. The distribution chain The distribution chain is the way products reach final consumers, and this can happen in two ways: in a direct distribution chain products are sold directly to final consumers, for example in factory outlets, or via the Internet; prices are lower, but the process can be inconvenient for consumers; in an indirect distribution chain products reach consumers through different intermediaries such as wholesalers , distributors, brokers or retailers ; prices are higher, but sales points are closer to consumers and a relationship between buyers and sellers is possible.