Different authors have given distinct meanings to the supply chain. Supply chain management (SCM) is the process and activity of sourcing the raw materials or components an enterprise needs to create a product or service and deliver that product or service to customers (Perkins and Wailgum,2017). According to Chopra and Meindl (2016), a supply chain consists of all parties that are involved in ensuring that the customer’s request is fulfilled. These parties can either be directly or indirectly involved, and the supply chain does not only include manufacturers and suppliers but also transporters, warehouses, retailers, and customers. Furthermore, a supply chain involves a constant flow of information, product, and funds among different stages. It is common that the word supply chain is interpreted as the movement of products or supplies between suppliers, manufacturers, distributors, retailers, and customers along the chain. However, it is essential to also include the flow of information and funds (Chopra & Meindl, 2016). Corominas, et al. (2015), state that the supply chain is a network consisting of cooperating units to provide customers and users with products or services. The word network implies that supply chains have a more complex structure, and that flows between the groups are an inseparable part of the supply chain (Corominas et al., 2015). However, the appropriate design of a supply chain depends on both the customer’s needs and what roles the different units involved have (Chopra & Meindl, 2016).
The supply chain involves a network of different activities, people, information entities, and available resources. It may also represent the steps it takes to get the service or product from its original state to the customer. Most companies develop an advanced supply chain so that they can lessen their costs and stay much competitive in the business landscape. Mapping out a supply chain is, however, one of the critical steps in carrying out an external analysis in a company’s strategic planning process. The primary significance of placing out the supply chain is that it helps an organization to describe its market and make a decision where it desires to be in the future.
According to Christopher, 2016, the primary objective of managing a supply chain is to coordinate the customers’ requirements with the material flow from suppliers to affect a balance between what are often seen as the incompatible goals of high customer service. The operation and design of an actual supply chain are of prime importance to every organization. When a company wants to develop an integrated supply chain, then the management of the material flow should be viewed from three main perspectives like strategic, tactical, and operational. At each aspect, the company should consider the use of facilities, people, finance, and systems, and they must be synchronized and coordinated as a whole (Mussomeli, Gish & Laaper,2016).
According to Monczka et al. (2015), the main focus should be on supply chain management, which is an essential part of the business process. There are several different links in the supply chain that requires expertise and skill. When supply chain management is useful in accompany, it can, therefore, lower the overall cost in the company and dramatically boosts its profitability. If one link is disrupted, it can disturb the rest, and the chain can be expensive for the company.