A supply chain is the movement of materials and unfinished goods that transform raw materials into a finished product that people can use. A supply chain can be short and local — for example, a nearby farmer selling produce at a farmer’s market. But many modern supply chains are long and complex, especially when it comes to consumer products such as electronics, furniture, and cars. Complex supply chains might involve raw materials from all over the world that are sent to storage facilities before arriving at manufacturing plants, where products are built and assembled. Once they’re made, products are shipped to warehouses around the world to be delivered to the consumers. Modern supply chains are designed to fulfill different roles depending on the product and customer expectations, from long-term purchase contracts to same-day delivery services. They’re also designed to quickly handle product returns to ensure consumers are satisfied with the return process while minimizing costs.

Supply chain managers oversee and direct the purchase and delivery of products and raw materials across a business’s manufacturing facilities, warehouse and storage facilities, and retail stores. They carefully plan where materials and products should go (and when) so that they’re used as efficiently as possible. While supply chain managers are experts in minimizing costs, they must also constantly balance price with other factors. For example, supply chain managers consider supplier reliability, including product quality and on-time delivery, economic factors such as import taxes and exchange rates, and even political factors like import/export policies and laws. Finally, supply chain managers always need to have a backup plan in case materials can’t make it to their destinations on time. A small delay in material delivery can lead to major delays further down the supply chain, which is why supply chain managers are so important.

Supply chain managers use various tools and applications to help their supply chains run smoothly and efficiently. Order processing tools help manage sales orders as well as order fulfillment. Shipping status tools help supply chain managers track products en route to their destinations and predict their arrival with real-time updates. Lean inventory tools optimize production throughout the entire supply chain to minimize inventory while still satisfying consumer demand. Demand forecasting tools use past trends and real-time data to help anticipate future demand and plan adjustments to production and raw materials. Today, many of these tools are incorporated into supply chain management software (SCMS). One of the most popular SCMS packages used by supply chain managers is SAP S/4HANA, designed to cover day-to-day supply chain operations and perform complex supply chain functions.