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What Is a Supply Chain Network?

Wholesaling involves selling products to customers in bulk.
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  • Written By: John Lister
  • Edited By: Kristen Osborne
  • Last Modified Date: 30 November 2014
  • Copyright Protected:
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A supply chain network is a more complex version of a traditional supply chain. It comprises all the related systems and facilities that can be used in a supply chain, rather than simply dealing with how one specific product goes from raw materials to customers. The phrase can also refer to a forum for different logistics firms to share ideas.

A traditional supply chain is the process by which a product winds up with an end user. It could involve steps such as mining for natural raw materials, using these to manufacture a product, packaging the product, distributing it to a wholesaler, distributing it to the retailer, and selling it to the customer. Supply chain management involves keeping track of these various steps and aiming to make sure they run as smoothly as possible, which cuts costs by avoiding waste and delays.

A supply chain network usually refers to a more detailed and advanced version of a supply chain network. It would usually encompass every procedure and facility that is used in supply chains. One way to imagine the difference is to picture the entire supply chain network as a flowchart and an individual supply chain as a single route through the flowchart.

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It can also be argued that a supply chain network covers what were previously seen as other aspects of a business set-up. One example would be real estate, such as business premises. In a simple supply chain, the distribution process may simply consist of finished goods going into a warehouse and then being shipped out to buyers. A supply chain network could cover the process of selecting the warehouse, making sure it is big enough to meet the needs of the supply chain without being so big it becomes wasteful through empty space, and so forth.

A supply chain network can also cover the use of modern technology. This includes the use of computerized stock tracking within a storage facility. It can also include automated tracking of both components coming into a factory and finished goods being delivered to buyers.

The supply chain network name can also be used to refer to a specific organization. This would be a business networking group made up of companies that are involved in the supply chain industry. The networking will involve exchanging business ideas and making new contacts to find suppliers and customers. In this sense, the phrase simply refers to a network of supply chain firms, in exactly the same way as you could have a network of widget manufacturers.

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