What is a Supply Chain? Definition and Meaning

A supply chain is the system of organizations, people, activities, information, and resource involved in moving a product or service from supplier to customer. Supply chain activities transform raw material and components into a finished product that is delivered the end customer.

A supply chain is a global network of organizations that cooperate to improve the flows of material and information between suppliers and customers at the lowest cost and the highest speed. The objective of a supply chain is customer satisfaction.

A supply chain can, therefore, be defined as a network “of an organization that is involved through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate customer”.

Supply chain management is a set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores so that merchandise is produced and distributed at the right quantities, to the right locations, and at the right time, in order to minimize system-wide costs while satisfying service level requirements.


A model of a supply chain is shown below:

E-commerce can be used to link all the member in the supply chain for a seamless flow of goods, services, and information about purchases, payments, delivery schedules and so on.

Supply Chain Goals:-

The main goals of supply chains are as follows:

  • Cost:-

Providing production, preparation, and manufacturing possible within a short development cycle time.

  • Time:-

Making production, preparation and manufacturing possible within a short development cycle time

  • Quality:-

Enhancing first-time-right decision, quality of products and services with high information and value-added contents.

  • Service level:-

Achieving customer satisfaction, employee satisfaction, and customer enrichment.


Also Read:-

What do you mean by e-commerce?

Why is e-commerce important? 

What are the functions of e-commerce?

Advantages and Disadvantages of E-commerce