How does a supply chain work?

A supply chain connects an organization and its suppliers, from raw material sourcing to end-product delivery. Supply chains may look different at each organization. Large, global enterprises typically have more complex supply chains than smaller businesses. However, supply chains of all sizes and complexities usually involve similar stages, including manufacturing, warehousing, delivery, and customer relationship management.

What are the typical stages of supply chain management?

Supply chain management typically includes supply and demand planning, production coordination, procurement, inventory management, and distribution. Each primary stage may include several subtasks. For example, at the supply and demand planning stage, supply chain managers complete tasks like material cost estimation and budget creation.

What qualifications do I need to work in supply chain management?

Supply chain management jobs commonly require a minimum of a bachelor's degree or industry-related experience from a job, internship, or apprenticeship. However, some employers may prefer a supply chain management master's degree or MBA.

Why is managing a supply chain so important?

Effective supply chain management can reduce bottlenecks and waste, manage costs, and improve efficiency in each stage of the supply chain. It also allows supply chain managers to draw on data for demand predictions, schedule forecasting, and production planning.

What is supply chain management?

A Caucasian female manager explaining supply chain connections on a global map during a meeting presentation for her colleagues.

By: Amy Boyington

Edited by: Mitch Jacobson

Published: January 8, 2025

An organization's supply chain manager is responsible for reliably and quickly getting products to customers — a critical component of a successful business.

Are you interested in a supply chain management career? Discover the responsibilities, requirements, and skills that supply chain professionals may need, and explore popular careers in the industry.

What is supply chain management, and why is it important?

Supply chain management systemizes an organization's production of goods and services. Products move through an organization's supply chain along an organized workflow to reach customers, from raw material sourcing and manufacturing to storage and delivery.

Businesses rely on an efficient supply chain to reduce costs and time. Supply chain management can also directly affect consumers who prioritize reliable deliveries, affordable pricing, transparent sourcing, and sustainable practices.

Supply chain management differs between the supply chain's front- and back-end.

Examples of front-end supply chain management

Sourcing raw materials
Overseeing material production and quality control
Scheduling machine maintenance
Verifying sourcing and processing compliance

Examples of back-end supply chain management

Managing product inventory
Projecting supply chain labor needs and costs
Negotiating contracts with vendors
Developing sustainable supply chain practices

What jobs can you get in supply chain management?

Supply chain management consists of several roles, including those below.

Purchasing agents: Purchasing agents research, compare, negotiate contracts with, and foster relationships with suppliers.
Logisticians: Logisticians oversee the flow of goods internally, including inventory and warehousing management.
Project managers: Project managers can collaborate one or multiple departments within the supply chain, such as logistics and inventory, to assign duties, ensure compliance, and keep tasks on track.
Distribution managers: Distribution managers plan, coordinate, and oversee product storage and delivery, transport vehicle maintenance, and warehouse safety programs.

These professionals may all report to a supply chain manager, a role we cover in detail below.

What do supply chain managers do?

Supply chain managers supervise all aspects of the supply chain, including product planning and material procurement, storage, and delivery. As a result, they work with several other supply chain professionals like logisticians, inventory managers, and purchasing agents.

Organizations rely on supply chain managers to identify and solve supply chain inefficiencies, reduce cost and time waste, encourage positive team member relationships, and analyze data to improve supply chain performance.

Because supply chain managers wear many hats, their role can be challenging. For example, they might need to resolve conflicts between workers or departments, participate in or host meetings, or analyze supply chain data within a single day.

Below are several hard and soft skills that can help supply chain managers succeed.

What do you need to work in supply chain management?

To work in this field, you'll usually need at least a four-year bachelor's degree in a relevant discipline, like supply chain management or business, according to CareerOneStop and the Bureau of Labor Statistics (BLS). As you gain experience through a job, internship, or apprenticeship, you could move into management roles, like distribution manager or supply chain manager, per the BLS.

Some employers prefer advanced education, like a master's in supply chain management or an MBA with a supply chain management concentration.

Pursuing a certification may also help you showcase your skills and knowledge to employers. The Association for Supply Chain Management (ASCM) and the Institute for Supply Management (ISM) offer multiple industry-recognized certifications for supply chain professionals, including ASCM's Certified Supply Chain Professional and ISM's Certified Professional in Supply Management®.

Which technologies are used in supply chain management?

Enterprise resource planning (ERP) software: ERP software coordinates activities across the supply chain, from raw material manufacturing to product delivery. Oracle PeopleSoft is an example of ERP software that consolidates processes across global supply chains.
Inventory management software: Inventory management software, like Oracle Fusion Cloud Inventory Management, helps businesses track and manage materials and products through each step in the supply chain in order to reduce waste and increase transparency and adaptability.
Process mapping software: Supply chain professionals can use process mapping software to create visuals of project workflows, material distribution, and logistics. For example, warehouse managers might use Microsoft Visio to create warehouse floor plans for easier navigation.
Procurement software: Also known as purchasing software, procurement software allows supply chain professionals to approve and document orders, make payments, and manage vendors. One example is OpenGov, which assists government agencies, like schools and utility departments, with asset management and purchasing.

Frequently asked questions about supply chain management

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