The Nature of a Supply Chain

The Nature of a Supply Chain

An economic activity is linked to a complex system of suppliers and customers, which must be supported by a transport system. The system as a whole is known as a supply chain. A supplier can be another’s customer, depending upon its position along the chain. Thus, a supply chain is a relative concept, but it is commonly applied to the whole sequence as an activity. Often retailing eventually acts as the final customer. Actors such as manufacturers, distributors, or retailers are placing orders, and the fulfillment of these orders results in their transportation. A supplier maintains outbound inventory (parts or raw materials ready to be distributed) while a customer maintains inbound inventory (parts or finished goods ready to be transformed or consumed). A manufacturer also has an in-process inventory, which implies all the parts currently used in the fabrication process.