Question

Identify the primary flows in a supply chain. Explain why there is flow in both directions and provide examples of each.

Answer 1

There are the following major flows in the upstream and the downstream networks of the supply chain:

1. Inventory flow: The raw material inventory flows from the upstream network; from the suppliers to the manufacturers. The work in progress inventory flows within the system in the midstream network and the finished goods inventory flows in the downstream network. The flow of the finished goods, WIP and Raw material inventory happens in the opposite direction as well. The same is owing to the returns in the supply chain network.

2. Cash flows from the downstream network to the upstream network. This is majorly owing to the facts that services/ goods and the cash flow has to be in the opposite direction.

3. Information Flow happens both back and forth, this is owing to the movement of information and process back and forth the network.