Operations Management: An Integrated Approach, 5th Edition

WHAT IS A SUPPLY CHAIN?

Supply chain

A network of all the activities involved in delivering a finished product or service to the customer.

A supply chain is the network of activities that delivers a finished product or service to the customer. These include sourcing raw materials and parts, manufacturing and assembling the products, warehousing, order entry and tracking, distribution through the channels, and delivery to the customer. An organization's supply chain is facilitated by an information system that allows relevant information such as sales data, sales forecasts, and promotions to be shared among members of the supply chain. Figure 4-1 shows a basic supply chain structure for a manufacturer.

At the beginning of the chain are the external suppliers who supply and transport raw materials and components to the manufacturers. Manufacturers transform these materials into finished products that are shipped either to the manufacturer's own distribution centers or to wholesalers. Next, the product is shipped to retailers who sell the product to the customer. Goods flow from the beginning of the chain through the manufacturing process to the customer. Relevant information flows back and forth among members of the supply chain.

Supply chain management is the vital business function ...