Basic Definition of Supply Chain and Supply Chain Management

Published by slang January 30th, 2007 in Supply Chain Mgmt

So what is supply chain?

It is simply an interrelationship, through which information, physical goods, and services flow back and forth, consisting of business entities that undertake value-creating activities that involved in supplying necessary materials, transforming various supplies into valuable goods and services, and distributing the final outputs to the customer markets.

Let’s illustrate a simplified supply chain which consists of the following essential processes:

Supply — operations(manufacturing & services) — distribution — market(the customers)

And Supply Chain Management (SCM) is the study of how to manage the supply chain in an optimum way to create the maximum value for the customers.

So in the above case of the simplified supply chain, the manager must then take into account various decision factors related to Supply Chain Management.

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