CHSCM 3.0 - Unit 1 - SCM in the Humanitarian World

The level of inventory is represented by the water level in the tank. One tap controls the rate of
input or supply, and another controls the rate of output or demand.
If the demand tap is closed and the supply tap open, gradually the level of inventory will
decrease until there is none left.
If we turn the supply tap is closed and the demand open, inventory will increase until it
overflows or, effectively, the tank bursts.
If the rate of supply is synchronized with the rate of demand, the inventory level will remain
the same. Indeed, if this were the case the need for any inventory could be questioned.
With no inventory in the tank, product would flow straight through from supply to demand.
In other words, it would become like a pipeline.
This concept of a pipeline will become helpful later on; it represents the utopia of all supply chain
managers.
The amount of inventory that is held in the supply chain is the result of how well it is managed. It will
affect how quickly products move through the entire chain. This, in turn, will reflect how fresh or
new the product is when it reaches the beneficiaries. Additionally, the amount of inventory held also
impacts the finance required to operate the supply chain.
The primary structure of the supply chain is created by the processing and storage facilities. To
enable products to flow from the supply point of the chain to the demand point, the different
facilities must be linked. These links are provided by the modes of transportation. They include
roads, railways, waterways, sea lanes, air lanes, and pipelines.
Each mode of transportation offers a combination of speed, cost, and reliability. In addition, each
has a different ability to handle volume, weight, and physical characteristics of products.
Sometimes it will be necessary to combine several modes of transportation to be able to move
product between two supply chain facilities. This is referred to move as inter-modal or multi-modal
transport.
So far, we have seen that a supply chain consists of facilities owned by different participants that
perform process cycles, that create different formats of inventory, and that are connected by
transportation links.
The task of the supply chain manager is to find a way to manage the flow of goods to the
beneficiaries. In doing so, there are two goals that must be met. First, the requirements of the
beneficiaries must be satisfied and, second, the activities must be performed at a cost that is
acceptable to the supply chain participants. The ability to achieve these goals will depend on how
well the supply chain flows are managed.