What is a Supply Chain?

So, what is a supply chain? It is an intangible collection of import-related elements.

There are many acronyms, industry-specific terms, and pieces of jargon thrown around in the world of global trade. Recently, a friend asked what should have been a reasonably simple question, “What is a supply chain?”

It took a minute to think about that.

Words like logistics and supply chain mean very little to someone who is uninitiated into international trade, but importers should be native speakers of this unique language. If you do import, but you are still confused by some of these terms, here’s your chance to learn about one in depth.

Each supply chain is unique and has some subtle, and some not subtle similarities and differences. There are, however, some of these elements that are common to most any supply chain—these are:

A product

The product is the reason a supply chain exists. This is the item that will be carried through the supply chain from start to finish. It could be anything from fishing lures to bananas to crude oil. The type of product being transported along the chain will have an effect on the rest of the chain, as some products require additional scrutiny, are physically very heavy, or are difficult to procure. Details such as type of product are part of what differentiate individual supply chains from one another.

Supply of Product

Great. You know what you want; now where do you get it? Your product could come from a neighboring state, down the street, or from a country half a world away. This product supply side is one extreme end of your supply chain.

Transport

You’ve got it, now how do you get it home? Transport is a vital aspect of a supply chain because there are so many variables and risks involved with moving a product from one place to another. It is important to have a good working knowledge of how goods are transported in order to avoid any unnecessary risks.

Compliance

The best, most efficient supply chain in the world is dead in the water if it’s not compliant. Government agencies like CBP and the FDA take their job of protecting our country’s borders and citizens very seriously. If the goods you’re trying to bring into the country even slightly compromise their goal of national security, you can bet they’re going to put a hamper on your import plans.

Security

Pirates? Yeah, they’re real. They’re actually more real than they were during the rum-swilling swashbuckling days, and they aren’t the only security threat. Anywhere in your chain that the human element exists, there is a necessity of security. Make sure you have a good grasp on supply chain security.

A Destination

The opposite extreme end of a supply chain is the product’s destination: this can be your warehouse, storefront, or doorstep. In the case of drop shipping, it’s your client’s doorstep.

Any links of a supply chain, if broken, can compromise the entire chain. Just think of Christmas lights—one goes out, the rest of them are useless. If you manage a supply chain, or just found out you do, it’s advisable to learn and understand each of these aspects of it as completely as possible. This primer is a good start, but now it is time for further research. Now that you know some of the terminologies, that research should go much more smoothly. Good luck, and happy shipping!