What is a supply chain?

What Is a Supply Chain?

In its simplest form, a supply chain is the activities required to deliver goods or services to the consumer.

A supply chain focuses on the core activities within your organisation to convert raw materials or component parts into finished products or services. You must look upstream to your suppliers and their supply of raw materials or components and downstream from your organisation's activities through to delivery of the goods of services to the end consumer.

If we look at a traditional manufacturing environment, the activity of interfacing with suppliers is generally supported by ‘procurement.’ The materials will then pass-through goods in warehouses (if products) through to the manufacturing site and onto the finished goods warehouse. This activity is the core activity of ‘operations management.’ Throughout the supply chain, logistics play an integral role in the movement of inbound materials and outbound goods to ensure the finished product flows downstream to the consumer.

A supply chain can take on the form of a product-based supply chain or that of a service. When thinking about a service, services will come together to offer an overall customer service, as opposed to a finished product. An example of this would be the shipping of customers goods. The staff, supply of vessel and fuel are all required to provide the shipping service to the consumer.

When your supply chain is connected with that of your suppliers and consumers, you can then start to build a supply chain network. You can then go onto understand the flow of both materials and information in a much more complex way.