WHAT IS A SUPPLY CHAIN? - CULTURE VOCABULARY - 2025

The supply chain is the set of organizations that are related to each other to ensure the proper execution of a production process. It is a set of operations that begins in obtaining the raw material and ends in the distribution of the product.

In this sense, suppliers, manufacturers, distributors and consumers are related in such a way that a product can be manufactured successfully, having at hand all the necessary inputs for its production within the established times.

The supply chain is mainly related to the raw material supply processes, its transformation and the subsequent distribution of the finished product.

It seeks to regulate the times, quantities and processes necessary to carry out this transformation economically and efficiently.

The main objective of this network of organizations is to guarantee the satisfaction of the end consumer, while taking care of costs, times and production processes within each of the organizations involved.

For this reason, all activities related to logistics management, coordination and collaboration between the different organizations involved within the supply chain are covered.

What is the supply chain?

The supply chain is born from the need for organizations to coordinate multiple processes simultaneously and efficiently. This is because no company is capable of controlling its flow of information, production and distribution without the help of external agents.

Therefore, the supply chain is defined as the set or network of organizations that work with each other to ensure that all the production processes of a company are controlled and regulated.

These processes range from those related to human talent, to those necessary for the manufacture of a product and its subsequent distribution.

What is the end of the supply chain?

The end of the supply chain is to obtain global welfare. In this way, the companies involved manage to be profitable and efficient, and the end consumer remains satisfied.

Normally, supply chains begin their management by analyzing the type of product to be manufactured.

This is how they focus on choosing the raw materials suitable for their production, planning the processes of manufacturing, storage and distribution of the finished product. Finally, the supply chain ends him with consumption of the product.

In the event that an error is made in any of the steps in the supply chain, the results of the supply chain can be seriously affected.

Features

The main function of the supply chain is to efficiently carry out the production process of a product, starting from the purchase of raw materials to the delivery of the finished product to the final consumer.

Within these functions different agents interact, including suppliers, manufacturers, transporters, distributors, sellers, and end consumers.

Supply chain benefits

Thanks to supply chains, companies are able to obtain benefits such as cost reduction and better management of the inventories necessary for the manufacture and marketing of different products.

It is also important to mention that, thanks to supply chains, the quality of customer service can be improved, and the purchasing, production and sales processes are much more efficient.

Thanks to the aforementioned, a supply chain has become one of the priorities within companies with a vision of success.

This is because they allow for better relationships between customers and suppliers. Therefore, a supply chain can give competitive advantages to those who use them.

Supply chain management

It is important to mention that, to achieve good management of supply chains, many of the companies with a vision for success use logistics processes as the main step for their development.

Logistics is the process of planning and carrying out actions that allow controlling the shipment of products or services within the established times and in the indicated quantities.

Logistics processes are useful to facilitate and streamline the production of goods within the supply chain, ensuring that the end customer is satisfied and companies are profitable.

In this sense, supply chains watch over four fundamental elements: quality, quantity, time and cost.

The way in which the correct handling of these four elements is ensured must be in constant change according to market demands.

It is important to note that the management of the entire supply chain can be affected by internal and external factors. These factors can facilitate its correct operation.

Technology and its relationship with supply chains

Today, we have external factors that allow us to carry out activities much more efficiently.

Since efficiency is one of the main qualities of technology, it makes it a favorable factor for companies and at the same time for supply chains.

Technology allows access to the internet, social networks and facilitate the exchange of data and information for the company's database, or market studies. Among other aspects that benefit companies.

Who uses the supply chain?

The supply chain can be used by different types of organizations, which are mainly divided into three types:

Industrialized companies

These companies maintain a large and complex production. For this reason, its supply processes, management and logistics processes become dependent on the warehouses or suppliers that are within its reach at that time, as well as on those who manufacture its product line.

Trading companies

Unlike industrialized companies, they have a less complex supply chain.

They fulfill the exercise of receiving and transporting the product again to the places of its commercialization.

Service companies

These companies refer to those with basic supply chains. They are in charge of moving the product from the marketers to its final destination, that is, the customer.

References

1. Charu Chandra, JG (2007). Supply Chain Configuration: Concepts, Solutions, and Applications. Deabron: Springer.
2. Hugos, MH (2003). Essentials of Supply Chain Management. New Jersey: John Wilei and Sons.
3. (2017). Investopedia. Obtained from Supply Chain: investopedia.com.
4. Leeman, JJ (2010). Supply Chain Management: Fast, Flexible Supply Chains in Manufacturing and. Germany: Institute II BPM.
5. Rouse, M. (2017). com. Retrieved from supply chain (SC): whatis.techtarget.com.