A supply chain is a network of individuals and companies that are involved in creating a product and delivering it to the consumer. Links on the chain begin with the producers of the raw materials and they end when the van delivers the finished product to the user.

Supply chain management is a crucial process because an optimized supply chain results in lower costs and a more efficient production cycle. Companies seek to improve their supply chains so they can reduce their costs and remain competitive.

Key Takeaways

• A supply chain is a network of companies and people that are involved in the production and delivery of a product or service.
• The components of a supply chain include producers, vendors, warehouses, transportation companies, distribution centers, and retailers.
• The functions of a supply chain include product development, marketing, operations, distribution, finance, and customer service.
• Many supply chains are global in scale.
• Effective supply chain management results in lower costs and faster production cycles.