The Basic Concepts of Supply Chain Management

A supply chain provides a company and the activities involved in the business what is needed in designing, making, using, and delivering of services and products. Any business depends on the supply chain in providing it with necessary survival and thriving methods.
A supply chain is in all regards a network of distribution and facilities, which perform functions in procurement of materials, transforming these materials into finished products and distribute the products to clients. A basic pattern is evident in supply chain management as they each have their own set of market challenges and demands.
Production is an important aspect in supply chain management, as many things have to be taken into consideration such as plant capability, quality control, Workload balancing, and equipment maintenance.
Inventory has to act as a buffer in a supply chain in regards to how much inventory to keep as it is one of the most expensive demands on a supply chain. The location of facilities in regards to inventory and production also plays a large role on the supply chain. Transportation is another item playing a big role in regards to amounts moved to a location. The sum of these above decisions defines the effectiveness and capabilities of a supply chain and its effectiveness.
A company must establish whether they are there to serve a mass market or small communities and compete on that basis. Production in a supply chain focuses on a supply chain’s capacity to manufacture and store products. The facilities on the other hand are warehouses and factories. The inventory, which is spread throughout a supply chain, includes everything involved in the process in order to have finished goods ready to be delivered. The location of where inventory is kept is just the geographical siting of where a company keeps its products, which are reflected in its supply chain.