Supply chain management is comprised of many business processes and entities, including suppliers, manufacturers, distributors, customers and transportation modes. Systems that support supply chain management include software, hardware and networks. Websites that offer services, such as transportation tracking and component sourcing, complement internal software systems to support supply chain management processes.
Suppliers of materials and components begin the supply chain for specific industries although they can be manufacturers or distributors themselves. Manufacturing companies determine which products to make or purchase from outside sources; they require suppliers to support the manufacturing process in a timely manner with high quality products.
Manufacturing companies can support other manufacturers, distributors or consumers with fabricated or assembled products. Manufacturers can have extensive supply chain issues within their own facilities, depending on the number of products produced and the manufacturing processes they are engaged in. Manufacturers can also contract for services to be performed on products during the manufacturing process; special processes are then required to manage the shipping and return of these products to the manufacturing facility for further processing. Manufacturers can have complex interactions with both customers and suppliers related to product design.
Distributors come in many forms and are a crucial link from manufacturers to other businesses and consumers. Distributors can also perform assembly operations or package parts for assembly by other companies. Distributors can carry inventory or operate as transaction coordinators between distributors and other businesses or consumers. Distributors that carry inventory can set up large and complex warehouses with automated materials handling equipment capable of automated retrieval of parts for shipment.
Transportation modes include trucking, rail and air. These modes are the link between suppliers, manufacturers, distributors, retail stores and consumers. Transportation and logistics management are services that can be performed by third party companies for the various entities in the supply chain.
Software is an essential component of supply chain management because of the importance of information flowing across the supply chain. Software records the transactions that occur when performing the shipping, receiving, issuing and movement of materials, components, assemblies and finished products. Supply chain management planning and control processes are also supported by software.