Supply Chain Definition

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There is no single supply chain definition but the understanding of the supply chain in today’s globalized business word has become a common one. To get us started, here are three supply chain definitions from some trusted dictionaries online:

Investorwords.com Supply Chain Definition:

The network of retailers, distributors, transporters, storage facilities and suppliers that participate in the sale, delivery and production of a particular product.

Businessdictionary.com Supply Chain Definition:

Entire network of entities, directly or indirectly interlinked and interdependent in serving the same consumer or customer. It comprises of vendors that supply raw material, producers who convert the material into products, warehouses that store, distribution centers that deliver to the retailers, and retailers who bring the product to the ultimate user. Supply chains underlie value-chains because, without them, no producer has the ability to give customers what they want, when and where they want, at the price they want. Producers compete with each other only through their supply chains, and no degree of improvement at the producer’s end can make up for the deficiencies in a supply chain which reduce the producer’s ability to compete.

Dictionary.com Supply Chain Definition:

Any sequence of processes involved in the production and distribution of a commodity

If you’re just looking for a simple yet comprehensive supply chain definition then you might want to use the official global-supply-chain-management.com definition of supply chain: the combination of every single process that is required to transform the necessary raw materials from their original source to final products available to end customers.    

In today’s business environment with globalization, specialization, innovation, and outsourcing it is absolutely crucial when trying to understand the supply chain to consider truly the total network of entities involved. One small problem along any part of your supply chain might cause severe problems for your business if you don’t evaluate them.

It is also wise to truly look at every single moving part, even ones that might not automatically be associated with the supply chain, because you never know what the future holds and what sort of process changes can lead to a vast change in the way your supply chain is formed. Vertical Integration, Horizontal Integration, Mergers and Acquisitions, Product Innovation, Customer Preferences, Legislative Changes, Economic Fluctuations and a host of possibilities can suddenly totally destroy your initial plans IF your company uses a narrow minded supply chain definition.