Sustainable Solutions for SCM

This type of supply chain structure does not occur in practice since real supply chains, especially from the industries, contain many subjects at every level. Such models are referred to as “networks”. A simplified example of a supply chain network model is shown in Figure 1.2.

Figure 1.2 Simplified model of network supply chain structure (modified according to [60])

The model shown in Figure 2 is still considered as considerably simplified since real models are in many cases much more complicated. For example, in the automotive industry, the number of first tier suppliers is in the range of hundreds to thousands. First tier suppliers are suppliers directly supplying components to the production plant. An even more complex network of second and further suppliers is behind these. Also, in other parts of the supply chain, subjects may exist in considerable numbers and with a complex structure of linkages. Links in the above figures represent flows in the supply chain. The basic types of flows include [46], [59], [11]: • Material flows include flows of materials, semi-finished products and finished products flowing towards customers, but also reverse flows from end-customers to suppliers. These are used on the basis of a claim for goods, warranty service, repairs, recycling or disposal of goods. In industrial practice, material flows are usually discrete, their movements are carried out in batches (transport, handling, production). • Financial flows include all types of payments, whether cash or non-cash. It also involves ownership relationships, various loans, invoices, bills of exchange, etc. • Information flows represent communication between subjects. They allow all movement in the supply chain and are part of all processes carried out in the supply chain. Information flows form a system of information about orders, places and times of supplies, demands, all movement of goods, capacities, customer requirements, but also individual activities of all subjects in the supply chain. • Decision flows are defined as the sequence of decisions of the participants influencing the overall performance of the chain. Managing this task requires usage of a wide range of principles and methods. All subjects in the

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