What is Supply Chain?

The expression “supply chain” was created during the 1980’s to explain the need to integrate important business processes.

Indeed, supply chain is about integration between business functions and business processes. It is about giving all the information which is important for any services in the industry and for partners of the company such as suppliers, retailers and so on…

In supply chain, there is a global and not a local optimisation.

The idea is to optimize the entire supply chain and not only results of the firm. A good supply chain involves a strong collaboration between actors of the supply chain. Therefore, there is a change of scale concerning competition; it is not a competition between firms but rather a rivalry between types of supply chains. Moreover, we have to show clearly the difference between logistics and supply chains because there is often confusion about these two words.

Logistic is a term which applies for the activity of a company. It involves just the distribution of the product whereas supply chain includes logistic, suppliers, manufacturers, retailers… “Supply chain” is a vast concept which has to be well understood in order to manage to have a good overview of potential problems and advantages of this sector.

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  • Jonas says:

    I agree with the difference between Supply chain & Logistics explain above. On a broader level, the process of supply chain management includes segments, such as product development, integration, manufacturing and procurement, storage of goods (such as raw materials and finished products), logistics, customer service, and performance management. On the contrary, logistics consist of segments like inventory management, warehousing, and transportation of the goods to the customers.

    • Tuấn Nguyễn Thanh says:

      Thanks for this useful information! It is not until after my second year at university that I can clarify these two concepts which should have been perceived right I choose my major.

    • Logistics solutions says:

      The major difference between logistics and supply chain management is that the flow and storage of goods inside and outside the firm is known as Logistics. The movement and integration of supply chain activities is known as Supply Chain Management. The main aim of Logistics is full customer satisfaction. Thanks for sharing this information.

  • Dumbel D Logostics says:

    A Supply chain is a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. Supply chain activities involve the transformation of natural resources, raw materials, and components into a finished product that is delivered to the end customer.

    The process involved in the production and distribution of a commodity is known as Supply Chain. For more information visit-(http://lmjlogisticsltd.in)

    A typical supply chain begins with the ecological, biological, and political regulation of natural resources, followed by the human extraction of raw material, and includes several production links (e.g., component construction, assembly, and merging) before moving on to several layers of storage facilities of ever-decreasing size and increasingly remote geographical locations, and finally reaching the consumer.

    • MUHIMBO says:

      Great. It’s well explained with a slight difference(s). People should not confuse and inter-use. Continue helping and improving SCM & Logistics world.

    • Greg Woodward says:

      This provides an excellent understanding between the differences in logistic manager and Supply Chain Manager. Thank you.

  • Sanjeev says:

    Logistics Management is a small portion of Supply Chain Management that deals with management of goods in an efficient way. Although, if we talk about Supply Chain Management, it is a broader term which refers to the connection, right from the suppliers to the ultimate consumer. People are quite puzzled between these two concepts.

  • Edward Joseph says:

    A supply chain is not just a term it refers to a complete mechanism. It integrates and streamlines the whole business processes, activities, and functions. The supply chain also ensures the smoothness of the flow of information that runs between the supply chain actors and stakeholders. In business terms, the supply chain integrates the people, organizations, and resources that are involved in moving products and goods from one location to another.

  • Samuel says:

    Good article Vivek. A supply chain acts as a network between an organization and its suppliers for producing and distributing a specific product to the final buyer. The process of the supply chain also represents the steps it takes to get the product or service from its original state to the customer. Supply chains are developed and promoted by companies so they can reduce their costs and remain competitive in the business landscape.

  • Max Freddie says:

    You have said it right “supply chain optimization is not local but global”. Supply chain processes and optimization are universal. Supply chain and supply chain optimization are very crucial. Supply-chain optimization is the application of processes and tools to ensure the optimal operation of a manufacturing and distribution supply chain. This includes the optimal placement of inventory within the supply chain, minimizing operating costs.

  • Benjamin says:

    Wonderful article on supply chain Vivek. Supply chain optimization is important. Through supply chain optimization, supply-chain managers try to maximize the profitable operation of their manufacturing and distribution supply chain. The profit depends on how well the process of optimization is carried out. If the optimization is faulty, the whole network of suppliers, actors, and retailers is disturbed and troubled.

  • Charlie Ethan says:

    Supply chain logistics, one of the most important aspects of the supply chain. Because so many organizations make up a supply chain, the logistics involved in getting products and services into the hands of the consumer can be crucial. Logistics is the backbone of supply chain and global trade. Supply chain logistics is a network of transportation, warehousing, and inventory where supply chain logistics executives must know how to choose the most advantageous mode of transportation, how to design and set up a warehousing facility.

  • Adam Finley says:

    Certainly, supply chain logistics must run smoothly and efficiently enough to satisfy customers and suppliers. The logistics related challenge comes in when comes the logistic management strategies. The implementation of logistic management strategies is important to make the logistics more transparent, quick and customer oriented. Most of the times, customers demand more transparency into the logistics processes and they want to know where their orders are, how they are being fulfilled, and where the inventory is at each step of the lifecycle.

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