Supply Chain: A Step Forward to Modern Logistics
Dr. Agus Setiawan

PhD Graduate and result-oriented Director with 25 years experience with involvement in all levels of Business Strategy, Sales and Marketing, Managing Project and Product Development. Aside of managing a company, he is also the best corporate trainer and public speaker in seminar and conference.

Supply Chain: A Step Forward to Modern Logistics

The creation and widespread use of analytics has added monitoring as a new layer to supply chain management. In order to satisfy the expectations of stakeholders, supply chain management has had to use technology as product life cycles have shortened and efficiency levels have risen. Real-time monitoring is also being promoted, especially in light of the mounting public pressure to maintain sustainability and social responsibility.

Supply Chain: a definition

A supply chain is the network of all the people, businesses, resources, tasks, and technological advancements involved in the production and distribution of a good. An entire supply chain, from the distribution of raw materials from the supplier to the producer to the final delivery to the customer, is included. The distribution channel refers to the portion of the supply chain that transports the final good from the manufacturer to the consumer.

The fundamental steps of a supply chain are as follows:

1. Sourcing raw materials.

2. Refining those materials into basic parts.

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3. Combining those basic parts to create a product.

4. Order fulfillment/Sales.

5. Product delivery.

6. Customer support and return services.

An effective, optimized supply chain is already crucial to a company's ability to fulfill consumer orders. However, when properly managed, it can also lead to much cheaper costs and a quicker manufacturing cycle. When it comes to operations in the supply chain, Supply chain management is the overarching word that includes product creation, sourcing, production, procurement, logistics, and more. Without it, businesses run the danger of losing clients and their ability to compete in their respective industries.

Supply Chain and its development through times

Although the newspaper "The Independent" is credited with coining the phrase "supply chain" in 1905, the idea of a network of suppliers, producers/manufacturers, and customers existed for a very long period before that. The term "supply chain management" didn't come into use until the 1980s, so the field is still unfamiliar when compared to closely related disciplines like manufacturing, procurement, and logistics.

The concept of supply chain management emerged in the 1980s and 1990s as a result of the necessity to integrate corporate activities throughout the whole global supply chain as a result of rising globalization, outsourcing, and information availability. This was a departure from the conventional supply chain, which only included the fundamental logistical production phases. Each company involved in a supply chain became focused on optimizing the entire chain instead of just their local operation as a result of the integration, which increased companies' visibility in stages that followed and preceded their own in the chain.

The management and optimization of systems and processes involved in moving a product from its raw material state to an endpoint, such as the consumer, is known as supply chain management. The goal of supply chain management, according to the Council of Supply Chain Management Professionals, is to "maximize customer value" while enabling a business to operate profitably.

Why supply chain is important

A supply chain's influence on the business might be either favorable or bad. Customer satisfaction and ROI are the two major components of the influence. Higher performance results mean satisfied clients.

An efficient supply chain, one that is well-connected and involves communication along the chain, entails a smooth return process. Efficiency is the reason why the supply chain meets or exceeds the customer's expectations. Higher order rates, a favorable customer perception, and lower cost-to-serve for the company all gain from this. Higher performance results in satisfied clients.

A customer is 71 percent more likely to become a repeat customer if they are satisfied with the way their return procedure was handled, according to Tobin Moore of Optoro, who shared this startling fact at Retail's Big Show in January 2018.

However, numerous dangers and opportunities exist at every stage of this procedure that might cause an entire customer purchase to fail. A number of factors can have a significant impact on the operation, including minimizing delays, maximizing the time of day that items are transported, reducing the amount of time inventory is kept on hand, and streamlining the order dispatch procedure. The chain may completely collapse in the absence of an optimized supply chain management procedure.

Big data and social media use over the past 15 years have exposed unethical supply chain practices that were previously unknown to the public. Analytics today play an even more crucial part in supply chain management due to the push from all around the world to have ethical, sustainable supply chains as well as the constant search for greater efficiency.


The strategy won't operate to its full potential if it isn't in line with the company's strategies. A planned, effective supply chain strategy that is in line with the organization's goals can lower operational costs, increase supply chain quality, decrease errors, and streamline procurement. Supply chain management aims to increase efficiency by coordinating the actions of the different supply chain participants. By doing this, a business may be able to outperform its competitors and improve the quality of the products it produces, both of which may result in higher sales and revenue.

Alshahrani, M. A. (2022) The Role of Supply Chain Resilience on SME’s Performance: The Case of an Emerging Economy. DOI:
Kato, H.; Maharjan, R. (2020). Resilient supply chain network design: a systematic literature review. DOI:

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