what is supply chain
A supply chain, also referred to as a "supply-chain," is a sophisticated logistics network comprising facilities that transform raw materials into final products and deliver them to end consumers or customers. At the same time, supply chain management focuses on efficiently managing the movement of goods within the supply chain.
Supply chain management plays a vital role as it leads to reduced costs and enhances the efficiency of the production cycle when optimized. Companies strive to enhance their supply chains to minimize expenses and stay competitive.
A supply chain encompasses a network of individuals and businesses engaged in the production and distribution of goods to consumers. The chain starts with raw material producers and concludes when the final product is delivered to the end user by a van.
Supply chain management (SCM) involves overseeing a range of activities such as procurement (acquiring raw materials/components), operations management, logistics, and marketing channels. These activities enable the transformation of raw materials into finished products and their delivery to end customers. A more specific definition of supply chain management entails the design, planning, execution, control, and monitoring of supply chain operations to generate net value, establish a competitive infrastructure, utilize global logistics, synchronize supply with demand, and evaluate performance on a global scale. This encompasses tasks like transporting and storing raw materials, managing work-in-process inventory, handling finished goods, and ensuring end-to-end order fulfillment from origin to consumption. In a supply chain, interconnected networks, channels, and businesses collaborate to provide
the products and services demanded by end customers.
The supply chain consists of interconnected components that collectively contribute to the creation of final products purchased by consumers. For instance, let's consider the production of automobiles. Before a car is purchased by a consumer, the process begins with the extraction of iron ore from the earth. This ore is then transported to a manufacturing plant where it undergoes transformation into steel, which forms the chassis of the automobile. Various components, including engines, batteries, electrical parts, rubber tires, metal body parts, and paint, are assembled to build the car. Once the car is fully assembled, it is sold to the end consumer in a retail environment.