Supply Chain Basics and Management

Supply chain definition and purpose

A supply chain is a complex logistics system made up of facilities and activities that convert raw materials into finished products and distribute them to end consumers or end customers. It is also described as a dynamic supply-and-demand network, where the flow of materials (and often information and finances) moves through multiple organizations and stages from upstream suppliers to downstream customers. The purpose of a supply chain is to enable products or services to reach customers efficiently and reliably. Supply chain management (SCM) focuses on optimizing the flow of goods through distribution channels to improve overall efficiency, match demand with supply, and coordinate processes so that materials can move through the chain in a way that reflects end-customer buying behavior. Because supply chains involve multiple tiers of suppliers and partners, their coordination affects cost, responsiveness, and performance across the entire network.

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Production and distribution stages

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