In business, supply chain management refers to the entire management of the transport and storage of goods, between locations and companies, and involves the transportation and delivery of goods, raw materials, work-in-process merchandise, and final goods to customer. This is important in terms of maintaining productivity, reducing costs, improving service quality, and increasing profitability. Supply chain management has five distinct strands or phases, each of which is necessary for the smooth progress of any business process. It starts with identification of resources and activities, which have to be coordinated and carried out; proceeds through planning and design of resources, transportation and storage, business development, operation and maintenance, and feedback or validation of performance.

An effective supply chain management system is crucial in making customers satisfied with their purchases and ensuring that goods are delivered according to schedule. To achieve this, a firm needs to adopt an integrated supply chain approach. It involves the collection, storage, production, transportation, distribution, gathering of resources, and communication of resources and payment. This distribution is done through networks and channels, including exchange of information and data, real-time processing, and personal electronic devices. A network is a set of networks that are connected in a coordinated way by common facilities and activities, with communication lines, such as trade and industry news, keeping tabs on the most critical moments in supply chain developments.

Supply chain planning helps organizations in realizing their short and long-term goals by establishing a strategy and setting action plans. It is essential to identify the key factors influencing supply chain management and address them, taking into consideration the impact of competition, economic conditions, changes in consumer preferences, environmental concerns, government policies, financing strategies, and customer demands. Strategic planning also involves identifying and evaluating key milestones and targets, evaluating potential threats and uncertainties, setting and adhering to a comprehensive strategy, maintaining communication with key stakeholders, improving the delivery and performance of goods and services and defining a new delivery model. Supply chain planning can be defined as a system that allows businesses to respond to various external and internal changes, with the aim of increasing productivity, reducing costs and eliminating wastes. Supply chain management helps firms to improve quality, reduce waste, improve flexibility, increase speed and minimize complexity while effectively integrating all processes in a common framework.

The basic functions of supply chain management include planning, manufacturing, processing, delivering, and end-to-end processes. These processes are usually performed at different levels within a firm, depending on the nature and size of the business. For example, manufacturing occurs when raw materials are transformed into goods that are ready to be supplied to customers. Delivery is done by the physical means, either by using transport vehicles, packaging material such as paper or plastic, or the most commonly used method, which is simply that - human-based logistics. End-to-end supply chain management is a term that is used to refer to the process of providing customers with finished goods, either in single product or a set number of products.

There are four main components that comprise the supply chain management of a manufacturing enterprise. These are inventory management, logistics, digital transformation and delivery. Inventory management takes into account both current and forecasted requirements, both for goods that have been bought and those that will be bought. It also takes into account whether these requirements will change during the manufacturing process and under what circumstances, for example, consumer demands might increase for particular products or for particular types of goods.

Logistics management takes into account factors such as transportation costs, capital expenditure required for purchasing raw materials and machinery, and the ability of the supplier to supply the requested raw materials at a price that covers overheads associated with such costs. Digital transformation involves planning how to best utilize existing information technology systems to make the process of producing, processing, transporting, storing and selling goods more efficient, thereby allowing the firm to better compete in the market. Delivery is usually done using transport vehicles, packaging and labeling equipment, which are also used in inventory and supply chain management. This process is often combined with logistics management to take stock of the finished goods and make sure they are delivered when specified. Digital transformation is also linked to demand creation and management, because it allows firms to forecast how much they will need, when it is likely to be needed and to establish a supply chain for them.

The fourth component of an effective supply chain management system is quality management. This is aimed at achieving a higher performance level in terms of quality control at all stages of the supply chain. Most companies perform some level of quality control during the production process itself. However, production, transport and storage, as well as marketing, storage and distribution, are generally carried out by companies outside of the company that can have a significant impact on the quality of end-products. For example, shipping companies that are used to providing reliable transport services to manufacturing units may deliver lower quality goods than necessary, because the quality control is not exercised while the goods are in transit.

Fifthly, companies need to work together. Supply chain management is about matching supply chain processes to customer requirements. It therefore makes sense for a firm to look to other firms that may have complementary limo service needs in order to take advantage of market asymmetry. A firm can build a network of suppliers which allows it to respond quickly to customer demand, for example.