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Management
What is a Supply Chain?
Supply-chain is a term that describes how
organizations (suppliers, manufacturers,
distributors, and customers) are linked
together
Supply Chains
A basic supply chain consists of a company, an immediate
supplier, and an immediate customer directly linked by one
or more of the upstream and down stream flows of
products, services, finances, and information.
An extended supply chain includes suppliers of the
immediate supplier and customers of the immediate
customer, all linked by one or more of the upstream and
down stream flows of products, services, finances, and
information.
An ultimate supply chain includes all the companies
involved in all the upstream and downstream flows of
products, services, finances, and information from the
initial supplier to the ultimate customer.
Supplier Focal firm Customer
(a) Basic supply chain
Suppliers Customers
Supplier Focal firm Customer
supplier customer
(b) Extended supply chain
Third-party
Logistics (3PL) provider
Initial Ultimate
Supplier Focal form Customer
supplier customer
Market
Financial Research firm
provider (c) Ultimate supply chain
Supply chain and the flows therein
Supplier 1 Forecasting and
scheduling information
Order flow
Logistics management
Manufacturer
Manufacturing
cycle
Distributor
Replenishment
cycle
Retailer
Customer order
cycle
Customer
Bullwhip Effect
The magnification of variability in orders in the supply-
chain
Retailers Orders Wholesalers Orders Manufacturers Orders
Demand Uncertainty
Low (Functional High (Innovative
products) products)