5.6.1 (HL)—Supply chain process

A supply chain links suppliers, production, distribution and customers; managing it coordinates material, information and cash flows across organisations.

Lead times, quality, dependency and visibility determine resilience. A local saving can increase total cost if it creates delays or defects elsewhere.

Map the chain, identify the constraint and ask how a change affects total flow rather than one stage.

A manufacturer changes supplier for a lower unit price but delivery variability causes stoppages and expediting costs.

Supply chain management is broader than purchasing; upstream and downstream effects matter.