What is a supply chain?

Here is this books explanation of supply chain:

A supply chain consists of all stages involved, directly or indirectly, in
fulflling a customer reuest! "he supply chain not only includes the
manufacturer and suppliers, but also transporters #arehouses,
retailers, and customers themselves!
A supply chain is dynamic and involves the constant $o# of
information, production and funds bet#een di%erent stages! &ach
stage of the supply chain performs di%erent processes and interacts
#ith other stages of the supply chain!
A typical supply chain may involve a variety of stages such as:
'ustomers
(etailers
)holesalers*distributors
+anufacturers
'omponent*ra# material suppliers!
,ome supply chain has all the stages but some has less according to
the businesss environment! &ach stage could be a market or a
hierarchy -please reference the frst class material.! /n /nternet supply
chain management, the designer must analy0e the businesss
environment identifes these stages and types!
The Objective of a Supply Chain
/n a supply chain, each stage generates some value! And the ob1ective
of every supply chain is to maximi0e the overall value generated! "he
value a supply chain generates is the di%erence bet#een #hat the fnal
product is #orth to the customer and the e%ort the supply chain
expends in flling the customers reuest!
,upply chain proftability is the total proft to be shared across all
supply chain stages not the single stages maximum proft! )e must
consider the entire chains proft! "he higher the supply chain
proftability, the more successful the supply chain!
/m emphasi0ing this one more time ,upply chain management
involves the management of $o#s bet#een and among stages in a
supply chain to maximi0e total proftability!
Decision Phases in a Supply Chain
A ,upply chain needs three phases to build! "hese phases are
strategy or design phase, planning phase, and operation phase!
2. ,upply chain strategy or design!
/n this phase, #e must consider ho# to structure the supply
chain! 3ocation, capacities of production and #arehousing facilities #ill
be considered in this phase too!
4. ,upply chain planning
/n this phase, companies defne a set of operating policies that
govern short5term operations! "hey collect data and produce market
and inventory level forecast! And they decide #hether they need
subcontract some of manufacturing or not in this phase!
6. ,upply chain operation
/n this phase companies make decisions regarding individual
customer orders! "hen, allocate individual orders to inventory or
production! And they also manage shipments, delivery and schedules
of trucks!
Process View of a Supply Chain
A supply chain is a seuence of processes -please reference the frst
class material. and $o#s that take place #ithin and bet#een di%erent
supply chain stages and combine to fll a customer need for a product!
"here are di%erent vie#s of this process:
'ycle vie#: "he processes in a supply chain are divided into a series
of cycles, each performed at the interface bet#een t#o successive
stages of a supply chain!
'ycle 7ie# of ,upply 'hain 8rocess has follo#ing cycles
'ustomer order cycle
(eplenishment cycle -at retailer*distributor.
+anufacturing cycle -distributor*manufacturer.
8rocurement cycle -manufacturer*supplier .
"he information $o#s from top to bottom and the products $o# from
bottom to top!
/n the customer order cycle, there are processes performing customer
order cycle!
'ustomer 9rder 'ycle
(eplenishment 'ycle
+anufacturing 'ycle
8rocurement 'ycle
4. 8ush*8ull vie#: "he processes in a supply chain are divided into
t#o categories depending on #hether they are executed in response to
a customer order or in anticipation of customer orders! 8ull processes
are initiated by a customer order, and push processes are initiated and
performed in anticipation of customer orders! "he pull process #orks
#ell #ith a custom ordering as the push process #orks #ell #ith mass
production!
,ome supply chain has both push and pull in its chain and #e can
identify this push*pull process boundary!
Here is an example of 33 :eans supply chain! "he customer order cycle
is a pull process and replenishment, manufacturing and procurement
cycles are push process!
"he ;ell 'omputers ,upply 'hain &xample
/n this company, the customer order and manufacturing cycles are pull
process and only the procurement cycle is push process!
The !portance of Supply Chain "lows
"here is a close connection bet#een the design and management of
supply chain $o#s and the success of a supply chain!
e!g!. ;ell has only 2< days of inventory contrast to other pc makers of
=< to 2<< days! "he success of the ;ell supply chain is facilitated by
sophisticated information exchange! -'ustomi0ed #eb pages. and
outsourcing!
;ell 'omputers ,upply 'hain ,tages