Distribution: The Supply Chain Process for Potato Chips

In order to do anything with your product, you have to first have and utilize a supply chain. These chains can and will vary from product to product and depending on what product you are looking at, it can vary in huge, drastic ways. Today, I will look at a specific product and go through and explain the supply chain for this product. The product I will look at will be potato chips.

The first step in the supply chain is raw materials and the gathering of these materials. Therefore, for potato chips, this is the gathering of the main ingredients and especially the potatoes which would come from local farms. The next step is the supplier and the supplier is the firm that would gather the potatoes in the first place (for example the farm). From there the supplier would ship the potatoes off to the manufacturer. This is where the conversion will take place from potatoes and other main ingredients (salt, flavoring, oil) into potato chips. This is the Frito Lay or Tostitos factory that is responsible for the “creation” of these chips, as well as the packaging.

From there, the potato chips enter the logistics phase where they are shipped via truck, train, or boat to the retailer. In this case, the retailer will be a grocery store, gas station, or possibly sports arena just to name a few. From here, the finished product is sold to the consumer.

Although the supply chain is long, in some cases this process must take place in a matter of days- especially for products that have an expiration date. With a streamlined process and intelligent logistics, it is amazing what firms can do when taking a raw material and transforming it into something completely different and much more valuable.