Every organization is part of a supply chain, either as a customer or as a supplier. Supply chains include all the processes needed to make a finished product, from the extraction of raw materials through to the sale to the end user. Supply chain management is the integration and coordination of all these activities.
The bullwhip effect distorts product demand information passed between levels of the supply chain. The more levels that exist, the more distortion that is possible. Variability results from updating demand estimates at each level, order batching, price fluctuations, and rationing.
Supply chains for service organizations can also have external suppliers, internal processes, and external distributors. The supply chain for a travel agency requires the agent to plan, arrange, schedule, and invoice travel by using potential travel service providers and then subsequently allowing those service providers to perform the actual travel-related service.
Many issues affect supply chain management. The Internet, the Web, EDI, intranets, extranets, bar code scanners, ...