A supply chain, also called a supply network is a system that consists of people, organizations, activities, resources, and information to move a product or service from the supplier to the customer. All supply chains initiate with the accumulation of raw materials and include further links of production such as the construction of components, their assembly and merger, before the product is moved for storage and other processes, before finally reaching the customer.
The people involved and the activities of a supply chain transform raw materials and other components into a finished product, which is ultimately delivered to the customer. However, it is important to note that companies, no matter how big they are in size, do not control the entire process of a supply chain. Companies reap profits only if their supply chain is well managed.
This means to plan, implement and monitor the everyday processes of a supply chain. It is actually to keep a track of availability of raw materials, their processing into finished products, and finally their distribution through the supply chain, if managed wisely, would bring laurels to the company and enhance its business, since it would then be able to provide a very high level of satisfaction to the customers.
In recent times, supply chains have become a little more complicated than before and their coordination is now undertaken by the high-level management of the company. Their verdict on the supply chain is final and employees are bound to adhere to their decisions to bring about efficiency in the supply chain.
Supply chains are managed on three different levels such as the operational, tactical, and strategy level. The operational level involves very short-term decisions, the tactical level is for medium-term decisions, and the strategic level is for long-term decisions.
The supply chain management system addresses certain problems such as management of the distributor network vis-a vis the quantities and the locations of people who take part in the processes of a supply chain.
Customers, suppliers, production facilities, warehouses, and distribution centers also take care of the strategies employed for distribution, the integration of systems and processes through supply chains to share significant information such as forecasts, transportation, and inventory.
The flow of supply chain management is bi-directional and SCM manages the movement of material, information, and finances of the supply chain. There are a number of supply chain procedures that are a vital part of the supply chain and these procedures are customer service management, product development and commercialization, distribution, and partnerships.
The above mentioned processes and activities involved in supply chains have made the supply and demand management processes much more simplified.
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