What is a supply chain?

A supply chain is a commercial link between a company and its network of supplier organisations to produce and distribute a specific product or service to the end buyer. This may involve people, activities, information, and resources involved in the provision to bring the offering to market.

The supply chain is likely to be involved in your planning, procurement, purchasing, production, transportation and logistics, storage, distribution, customer service and returns.

As an example, the chain could look like this for a retail business: sourced raw material producer supplies – logistics – manufacturer – storage – distributor – retailer – retail customer.

A good supply chain is a collaborative process planned across all the required functions. It concentrated on the desired process first, then considers efficiency, effectiveness and costs, with the purpose of looking to improve the process and reduce the cost of sale

Many businesses are now considering their ability to demonstrate ethical practices. For example, what materials are used to produce the product or who is producing the raw materials or manufacturing the product and whether they are fairly paid whilst working is respectable, safe conditions.

As a business responsible for the relationship with the end buyer, then a key role is your supply chain management. This is the management of the flow of goods and services and includes all processes that transform raw materials into the final products.

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