Note that the supply chain is linear and it involves three basic parts:
1. Upstream supply chain. This part includes the organization’s first-tier suppliers
(which themselves can be manufacturers and/or assemblers) and their
suppliers.
• Such a relationship can be extended, to the left, in several tiers, all the way to the origin of the material (e.g., mining ores, growing crops).
• Here the major activities are purchasing and shipping.
2. Internal supply chain. This part includes all the processes used by an
organization in transforming the inputs shipped by the suppliers into outputs,
from the time materials enter the organization to the time that the finished
product goes to distribution, outside the organization. Activities here include
materials handling, inventory management, manufacturing, and quality control.