What is a supply chain?

One of the key concepts in business practice is supply chain. What is supply chainWhat elements does it take into account and why is it so important for the functioning of enterprises? 

Supply chain definition

Supply chain is a commonly used concept in the practice of business operations. It covers all processes related to the acquisition and transport of raw materials for production, the manufacture of goods, to the delivery of the finished product to the end customer and the final settlement of the transaction. In effect, the supply chain (supply chain) consists of planning, implementation and control of all activities related to the production and delivery of the product to the consumer. As part of the supply chain definition the flow of information relevant to the entire process is also taken into account. Supply chain diagram can be presented in the form of a route from the raw material supplier, through raw material receipt, production, storage, transportation, sale to delivery to the end customer. 

Supply chains Currently, they are extremely complex processes that may take into account many entities and complex networks of connections between the various elements of the system. This process is additionally complicated by widespread globalization, which includes many contractors from distant corners of the world into the system. 

What are the supply chain stages

Global supply chains can be divided into three basic stages. The first is supply. Including element of the supply chain the raw materials necessary to start production processes are obtained and delivered. Another one link in the supply chain is the production of goods, which allows the production of finished goods. The final, third element of supply chains is the distribution of goods. At this level, many entities related to the storage, sale and distribution of goods to consumers are involved.  

It is worth emphasizing at this point that today's supply chains they are characterized by great complexity and great dynamics. They must also place emphasis on the increasing customization required by end customers, greater precision of operation and the growing need for efficiency aimed at constantly increasing the competitiveness of the enterprise. The complexity of the processes forces the use of more and more advanced planning and implementation tools. Precise inventory management and accurate product traceability become key. As the complexity of the processes increases, it is necessary to use software that will be able to effectively monitor the effectiveness indicators of the project. 

In such a complex world, it is also important to integrate all actors involved in implementation supply chain. The unification of processes and the pursuit of joint planning allows for the smooth implementation of individual projects supply chain elements. 

With the increase in production, it becomes necessary to implement process automation, the aim of which will be to increase the precision and speed of implementation of individual elements within each of the links in the supply chain. Here, the key will be the automation of warehouse processes management, the management of internal logistics processes in warehouses and the optimization of transport management. 

Supply chain i logistic chain - are these concepts the same?

Supply chain i logistic chain they are often used interchangeably, but de facto logistic chain is one of links in the supply chain. As supply chain covers all processes from collecting raw materials to final delivery to the end customer, yes logistic chain It applies to all processes after the production stage - i.e. storage, transport and distribution of manufactured products. 

For easier understanding of the problem supply chain let's use an example car production and sale. Supply chain it will cover the collection of raw materials for the production of components and entire cars, then the production of vehicles, their storage, delivery to dealers and final sale to consumers. In case of the logistics chain it will only be the purchase of models of various cars for 1 showroom, their presentation at the site, sales and customer service, and handing over the purchased model to the consumer.