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.

What are the stages within a supply chain?

There are many stages and activities with a supply chain. Porters Value Chain sets out the activities that add value and are split into primary and support activities. Porters Value Chain helps organisations to understand and examine all activities and how they’re connected.

What is supply chain management?

Supply chain management takes a broader view of influences that will impact your supply chain. When discussing supply chain management, you’ll then start to understand the strategic decisions that influence supply chain activity.

Once the strategy has been set for the organisation, any decisions then made within the supply chain must ensure that they deliver against the corporate strategy, this is supply chain management in operation.

What is the main goal of supply chain management?

The goal of supply chain management is to look holistically at the entire supply chain from supplier through to the consumer. It’s then important to review three core areas of people, process, and systems to maximise value from all activities.

Why is supply chain management important?

Effective supply chain management improves the financial position of an organisation by delivering value which is linked to the organisation’s corporate strategy. Supply chain management plays a significant role in customer satisfaction through the delivery of products and services. Good supply chain management is critical at reducing operating costs from procurement activities, through operations and logistics functions and throughout the whole supply chain. The scale of profitability for large organisations is relative to the management of an organisations supply chain.

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