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At the same time, supply chain management helps organizations reduce operating costs and procurement costs while optimizing profitability. Good supply chain management helps ensure customers receive the goods they need on time and at or above their quality expectations. developing an overall strategy for the supply chain As explained by Investopedia, supply chain management includes five steps: Supply chain management oversees this entire complicated process. Distributors could include multiple parties: wholesalers, retailers, and e-commerce partners, among others. A distributor then takes the product from the manufacturer to the customer. Manufacturers procure those inputs and convert them into a product.

The supply chain starts with vendors and suppliers who provide the raw material inputs for the goods.

A supply chain is a network of businesses and processes that contribute to the creation, distribution, and ultimately the sale of a product.

What Is the Supply Chain?īefore we dive into the two subcategories, it’s important to understand what a typical supply chain includes. Here’s how these two concepts work in practice as well as different approaches to managing downstream and upstream supply chains. Supply chain management is a complex task, but dividing downstream and upstream supply chain tasks can help add clarity to the process.īy breaking down the supply chain into these two categories, supply chain managers can gain deeper insight into inefficiencies or obstacles, optimize costs, and ultimately maximize customer value. Nearly 80% of companies that develop high-performing supply chains are able to achieve greater-than-average revenue growth within their industries. Supply chain management seeks to maximize customer value and help an organization achieve a sustainable, long-term competitive advantage.

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