You can think of asupply chain as being any two parties or more that are linked by a flow ofresources. The idea of supply chains is managing flows: flows of product ormaterial, flows of information, and flows of money.
And all of thesethings, all of these three flows, manage between the multiple parties andultimately fulfill a customer request.
In real life, I havemultiple raw material providers, retailers, distribution centers that areservicing multiple locations. So it's not just a simple link, one to the other.It's more of a web. But the common phrase is supply chain.
The idea ofdownstream and upstream and tiers of suppliers is common in all supply chains.
When people talkabout a downstream supply chain, what they're talking about is the directionthat the product flows. I might sell to wholesalers, who then in turn sell toretailers, who in turn sell to customers. And when people say upstreamlogistics--they're talking about your suppliers.
But it's veryhelpful to think about the supply chain as one entity that's providing value tothat customer. We wanna maximize the total value generated. It's what thecustomer pays minus the total effort it takes to fulfill that order.
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