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What Is a Supply Chain?

It takes a long and complicated process before a product is successfully delivered from the factory to the consumer. This process is called the supply chain. It is composed of the suppliers (the makers of the goods), the storage facilities, the transporters, the distributors (who send the goods to the different sale points) and the retailers (the sellers). They are part of the production, delivery and sale.

The supply chain involves several companies, thus requiring an excellent coordination system in order to beat competition (and pull a profit for all their efforts).

The supply chain has three important components. The “supply” side refers to the raw materials, and tackle the concerns of where the materials come from, how they are delivered, and the amounts and timelines.

“Manufacturing” is the production aspect. It processes the raw materials into the finished goods. It often involves thw question of cost, production efficiency (e.g. minimizing waste), quality control, and product development.

“Distribution” gets the products from the factories to the shelves. This involves warehouses, where the products are initially stored, distributors, and the retailers.

The supply chain indicates how these various companies and processes interact and fit together. While the term is most frequently applied to consumer products and the manufacturing sector, it has also been used in other industries, such as finance and Internet technology.

The supply chain strategy works focuses on creating the most efficient process to get products or services to the market. It is an “operations” issue. This managerial function is called “supply chain management.”

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