What is the Supply Chain

Supply Chain is the process created when a customer places an order until the product or service is delivered and paid for. Therefore, the supply chain involves the planning, execution and control of all activities related to the flow of materials and information, the supply of raw materials, the intermediate processing of the product as well as the its delivery to the end customer.

Therefore, we can define the supply chain as all the stages and networks taken by the product, from its manufacture to its arrival at the end customer. It is made up of many suppliers and companies that supply each link in the chain.

Nowadays, supply chains have become very complex due to internationalization, increasing types of flows and changing global consumption patterns.

Different stages of the supply chain

The supply chain is divided into three main phases:

  • Sourcing: Refers to how, where and when raw materials are purchased and supplied to manufacture products.
  • Production: This is the manufacture of finished products from raw materials.
  • Distribution: This stage concerns the activities that are carried out until the products reach their final destination. It is carried out through a network of wholesalers, warehouses, physical stores or online platforms (for e-commerce companies).

The supply chain is often associated with the value chain, where products gain value as they move through the process. As we saw in our article on warehousing logistics, the warehouse is at the heart of the supply chain.