What is Supply Chain?
APICS* defines supply chain as, “The processes from the initial raw materials to the ultimate consumption of the finished product linking across supplier-user companies.” and further defines it as, “The functions within and outside a company that enables the value chain to make products and provide services to the customer.” The Supply Chain Council’s definition is, “All customer interactions (order entry through paid invoice), all physical material transactions (supplier’s supplier to customer’s customer, including equipment, supplies, spare parts, bulk product, software, etc.) and all market interactions (from the understanding of aggregate demand to the fulfillment of each order).”
Given the above definitions, it’s clear why the supply chain is perhaps the single most important process within company operations. It contains almost all of the assets, touches almost all of the costs and delivers all the product to the customer.
Traditionally, most companies have focused primarily on what’s inside the “four walls” of their factory to improve operational performance. However, there are significant efficiencies and cost savings to be realized by improving the performance of the entire supply chain. The difference between an average and well-run supply chain can mean significant profit improvements.
*APICS is the premier professional association for supply chain management and the leading provider of research, education and certification programs that elevate supply chain excellence, innovation and resilience. The APICS Certified in Production and Inventory Management (CPIM), APICS Certified Supply Chain Professional (CSCP), APICS Certified in Logistics, Transportation and Distribution (CLTD) and APICS Supply Chain Operations Reference Professional (SCOR-P) designations set the industry standard. With over 45,000 members and approximately 300 channel partners, APICS is transforming the way people do business, drive growth and reach global customers.