What is Supply Chain? Components in the supply chain

What is Supply Chain? What is the role, composition and purpose of the supply chain? Let's find out this information in the fo llowing article of Viindoo !

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What is a supply chain?

Supply chain is a system of activities involving organizations, information, people, facilities, and other resources. All these resources participate in and contribute directly or indirectly to the process of moving goods from producer to consumer. Typically, a supply chain includes manufacturers, suppliers, carriers, warehouses, agents, or even customers.

If you compare the supply chain as a business, it will be represented through departments, such as marketing, logistics, customer service department, etc. These departments will take on a role, separate but closely linked to the common goal of satisfying customers' wishes and increasing profits for the company.

What is a supply chain

Supply chain is a set of activities to bring products to consumers

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Components of supply chain

After having answered the question of what is a supply chain, then which are the components of the supply chain? Supply chain is divided into 5 key components:

Sourcing of raw materials

This is the first component and plays an important role in the supply chain. This is because input materials are the key factors that determine product quality. If the supply of raw materials is disrupted, production plans and supply chains will both be disrupted.

Production unit

The production unit will take on the role of processing raw materials to form products that meet customer needs. The production unit is the component that directly affects the quality of the finished product.


Distributors are assigned the task of delivering products to customers. However, distributors often ship large quantities of products, mainly sending products to resellers rather than directly to end consumers.

Distributor in  supply chainDistributors are in charge of transporting goods to customers or retailers.
Customers in  supply chainThe customer is the last element in the supply chain


Retailers are grocery stores, supermarkets, convenience stores, etc., intermediaries between distributors. to consumers.

Customers (Consumers)

Customers are people who directly consume and use products and goods. This is also the final component and end of the supply chain.

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What is the role of the supply chain?

What is the purpose of supply chain and the role of the supply chain? Each business will determine the purpose of the supply chain differently, however, the most important purpose is always to bring products and goods to consumers.

Supply chain directly affects the production process, business and development of enterprises. If businesses build an inefficient supply chain, it will affect their competitive advantage. On the contrary, businesses with a good supply chain will create a foothold in the market sustainably and increase their ability to develop in the future.

What is the role of the supply chain

Supply chain helps businesses come up with effective business strategies

Current status of logistics and supply chain management in Vietnam

Currently, some businesses in Vietnam have not really seriously considered the importance of supply chain and logistics in the market. This causes businesses to ignore the components of the supply chain and only focus on Marketing and sales.

So how can businesses overcome the challenges of supply chain management and improve business operations? The best way is to optimize their supply chains, identify components and understand the role and purpose of each stage in the supply chain.

In the stage of re-optimizing its supply chain, businesses need to make a comprehensive self-assessment of their company's activities and consider whether the supply chain has worked well and fully met the needs of customers and businesses. This assessment will help businesses detect and recognize problems to come up with strategies and timely solutions.

If you need support on optimal solutions for processes and activities in the supply chain, Viindoo is ready to support and advise you on the most modern and advanced solutions to keep up with supply chain development trends.

The logistics supply chain system

The logistics supply chain system is quite popular in the market.

Above are Viindoo shares on the question of what is supply chain. Hope the information on the article has helped businesses have more knowledge on the problem!

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What is Supply Chain? Components in the supply chain
Viindoo Technology Joint Stock Company, Monica Nguyen December 3, 2022

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