Introduction: The flow of raw materials from suppliers, processing or converting the raw

materials into completed products, and distributing them to end-users is referred to as the
supply chain. The management of the supply chain includes everything from supplier
selection to processing and dealing with manufacturing demand changes. Firms will
achieve/gain a competitive edge over their competitors after they develop a well-thought-out
and effectively managed supply chain.

1) The Benetton Group is a great example of how to run a supply chain effectively. The raw
components for their product, which are the textiles, are sourced from small contractors
throughout the entire process, from start to end. Small-business contractors subcontract
manufacturing duties, such as knitting and assembling clothing, which is advantageous to
Benetton. Small contractors are more cost-effective than larger contractors since they
charge less. Furthermore, using a small-firm contractor allows Benetton to more readily react
to fluctuating demand since they can simply bargain with the small contractor on the quantity
needs they needed depending on current demand. Benetton then puts the final touch and
sends the finished items to their retail outlets as part of the supply chain. Because they
allocated work to agents to operate their retail locations, they were able to swiftly react to
varying needs. In fact, proper business management may provide them an advantage in
getting to know their clients and their preferences. As a result, the corporation can simply
estimate demand and act quickly, producing only the quantity of things that are in demand.
They also adhere to a well-organized inventory system. I believe the company has cheaper
inventory expenses since it only keeps tiny finished goods owing to limited retail space. This
can assist reduce inventory keeping costs in retail establishments.

2) The Benetton supply chain is one of the most well-known examples of how a company
may exploit its supply chain to gain a competitive advantage. The Benetton family founded
the firm in the 1960s, and it is today one of the world's leading clothing retailers, with stores
bearing its name in practically every country. Part of its success may be attributed to the way
it organises both the supply and demand sides of its supply chain. Although Benetton
manufactures much of its own material, it mainly relies on 'contractors' for its supply chain.
Contractors are firms that knit and assemble Benetton's clothing and offer services to the
Benetton facilities (many of which are entirely or partially owned by Benetton workers).
These contractors, in turn, hire subcontractors to help them with some of the production
duties. This benefits Benetton's production processes in two ways. First, because the tiny
supply firms have lower expenses, its manufacturing costs for woolen products are much
cheaper than those of its competitors. Second, by modifying its supply arrangements,
Benetton is able to absorb demand changes without suffering the full impact of demand
swings.