Supply chain
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A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials; transformation of these material into intermediate and finished products; and distribution of these finished products to customers. (Source: Ganeshan & Harrison - Introduction to Supply Chain Management)
A supply chain is a chain of processes which supply one to another. In its most simple layout, the chain is a one-way sequence of processes:
process P(1) ===> P(2) ===> P(3) ===> ... ===> P(n)
In more complex, real-world situations, the involved processes can form a whole supply network where processes can supply to each other and form flexible patterns. This concept can be applied to many types of processes, e.g. in the field of manufacturing, but also in IT for example or in finance.
-- Manufacturing
A supply chain essentially has three main parts, the supply, manufacturing and distribution:
- The supply side concentrates on how, where from and when raw materials are procured and supplied to manufacturing.
- Manufacturing converts these raw materials to finished products and
- Distribution ensures that these finished products reach the final customers through a network of distributors, warehouses and retailers.
Usually also Planning is considered to be part of Supply Chain, it deals with planning and orchestrating the flow of goods and information between the above three areas.
The chain can be said to start with the suppliers of your suppliers and ends with the customers of your customer.
-- Other fields
As indicated above, the idea of modeling processes as chains can be applied to other fields as well: the concept is useful to show dependencies between all involved objects. In an IT system, programs or modules use input data and deliver output for other modules.
Related articles
- distribution
- logistics
- marketing
- manufacturing
- supply chain management
- trade item
- transport
- APICS
- APICS website (http://www.apics.org)