What is Supply Chain

A supply chain is a network of upstream and downstream companies involved in the production and distribution of products and services to end users.

The supply chain is a functional network of suppliers, manufacturers, distributors, and end-users that begins with the supporting components, continues with the intermediate and final products, and ends with the sales network that delivers the products to the consumers.

The concept of supply chain management is to optimize the supply chain as a whole from the consumer's point of view through collaboration among enterprises. Successful supply chain management coordinates and integrates all activities in the supply chain into a seamless, integrated process.

Strategic Significance:

The goal of supply chain management is simple, to satisfy the customer's needs at an optimized cost. As shown in Figure 1, we need to match supply capacity on a global scale with market demand on a global scale.

And effective supply chain management has a direct effect on business performance. The objects of supply chain management are production and sales, inventory and expenses. Increased sales, lower inventory, and reduced expenses directly improve overall business performance indicators such as profit, return on investment, and cash flow.