Supply chain is the co-ordination of the production, inventory, location, and transportation among the participants in a supply chain

to achieve the best mix of Managing a supply chain is more complex and difficult than managing an individual firm. But, the principle of management is used to integrate a firm own internal function (value management) also apply to managing the entire supply chain. Those firms the successfully integrated their purchasing, operation and distribution functions did improve their performance in the past. The power of supply chain management is its potential to include the customer as a partner in supplying the goods or services provided by a supply chain. Integrating the customer into the management of supply chain has several advantages. First, integration improves the flow of information throughout the supply chain; a second advantage of integrating the customer into the supply chain is that this integrates the products development function (QFD analysis) with the other function in the firm. By focusing a customer, all members of supply chain see the need and benefits of obtaining and using information about the end customer. Supply chain management, just-in-time, quick response manufacturing, total quality management, vendor management, agile manufacturing, etc all share the goal of improving customer satisfaction. All this attempt to improve customer service by eliminating waste from the system in all of its forms including wasted time. Supply chain management embraces the other philosophies and extends the scope from one firm to all the firm in a supply chain. There is difference between the concept of supply chain manage ment and traditional concept of logistics, logistic typically refers to activities that occur within the organization and supply chain refers to network of organizations that work together and coordinate their actions to deliver a product to market. Also, traditional logistics focusing its attention to activities such as purchasing, distribution, maintenance, and inventory management. In the wider view of supply chain thinking, these additional activities are now seen as part of the work needed to fulfill customer request. Supply chain management views the supply chain and the organization in it as a single entity. Supply chain brings a system approach to understanding and managing the different activities needed to co-ordinate the flow of products and services to best serve the ultimate customer. Effective supply chain management requires simultaneous improvements in both customer service levels and the internals operating efficiencies of the companies in the supply chain. There is a basic pattern to the practice of supply chain management. Companies in any supply chain must make decisions individually and collectively regarding their actions in productions, inventory, Location, Transportation and Information. So far, we have discussed the concept of both supply chain and its management. Let us now try to understand the importance of supply chain in the next section.