And tenneco might receive raw material to manufacture

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and Tenneco might receive raw material to manufacture the packaging from other suppliers. This supply chain is illustrated in Figure 4.1. Supply chain is dynamic and involves the constant flow of information, product, and funds between different stages. Each stage of the supply chain
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39 performs different processes and interacts with other stages of the supply chain. Food World provides the product, as well as pricing and availability information, to the customer. The customer transfers funds to FoodWorld. FoodWorld conveys point-of-sale data as well as replenishment orders to the Distribution Center (DC), which transfers the replenishment order via trucks back to the store. FoodWorld transfers funds to the distributor after the replenishment, The distributor also provides pricing information and sends delivery schedules to FoodWorld. Similar information, material, and fund flows take place across the entire supply chain. P&G or Other Manufacturer Wal-Mart or Third Party DC Wal-Mart Store Customer want Detergent and goes to Wal-Mart Plastic Producer Chemical Manufacturer (e.g.: Oil Company) Paper Manufacturer Timber Industry Tenneco Packaging Chemical Manufacturer (e.g.: Oil Company) Fig.: 4.1: Stages of Detergent Supply Chain In another example, when a customer purchases on-line from Dell Computer, the supply chain includes, among others, the customer, the Web page that takes the customer's order, the Dell assembly plant, and all of Dell's suppliers and their suppliers. The Web page provides the customer with information regarding pricing, product variety, and product availability. Having made a product choice the customer enters the order information and pays for the product. The customer may later return to the Web page to check the status of the order. Stages further up the supply chain use customer order information to fill the order. That process involves an additional flow of information, product, and funds between various stages of the supply chain. These examples illustrate that the customer is an integral part of the supply chain. The primary purpose for the existence of any supply chain is to satisfy customer needs, in the process generating profits for itself. Supply chain activities begin with a customer order and end when a satisfied customer has paid for his or her purchase. The term supply chain conjures up images of product, or supply, moving from suppliers to manufacturers to distributors to retailers to customers along a chain. It is important to visualize information, funds, and product flows along both directions of this chain. The term may also imply that only one player is
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40 involved at each stage. In reality, a manufacturer may receive material from several suppliers and then supply several distributors. Therefore most supply chains are actually networks. It may be more accurate to use the terms supply network or supply web to describe the structure of most supply chains.
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