Definition Of Supply chain - What Is Supply Chain?

Definition of supply chain. What is supply chain? That is a common question. Here's the answer.

Supply chain is the entire process involved in the manufacture and distribution of a company's products right from the material suppliers to the customers.

This process includes:

>> Materials sourcing
>> Materials procurement
>> Materials storage
>> Production planning
>> Product manufacture
>> Finished product storage and
>> Distribution of the finished products

The supply chain is the nerve-centre of any maufacturing company. The supply chain responsibilities is usually grouped into departs such as:

>> Purchasing department
>> Stores
>> Manufacturing or Production department and
>> Logistics or distribution department
>> Engineering - Instrumentation, power generation, steam generation (boiler house), refrigeration departmental etc
>> Project department
>> Technical department - S & T, Laboratory, Quality assurance etc

Different organizations have different supply chain structure depending on how the leadership of the organization sees the peculiar challenges of the business and how the supply chain structure can integrates to optimize efficiency.

A huge part of the cost in a manufacturing outfit is incurred in the supply chain. And hence, companies often see this team as the biggest area they can cut cost.

However, this can be sometimes over-bloated because some of the costs associated with the supply chain team are actually incurred by support services like finance and marketing. In many cases, this expenses is allocated to products during product costing. And so, fall back to supply chain as product cost.

That is why employees sometimes say "supply chain is in chains".

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