Supply Chain Management Vocabulary

Vocabulary terms and definitions covering core Supply Chain Management concepts, strategy types, SCM objectives, and fundamental flows.

Supply Chain

The process of getting products from the supplier to the customer, consisting of all parties involved, directly or indirectly, in fulfilling a customer request.

Supply Chain Management (SCM)

The broader integration of key activities across Planning, Sourcing, Production (Making), Delivering, and Returning.

Reverse Supply Chain

The process of returning products from customers back to the company for after-sales, recycling, or secondary sales.

Upstream

The direction in SCM moving from suppliers providing raw materials into internal manufacturing.

Downstream

The direction in SCM moving from internal manufacturing and storage through distribution and retailers to the end customer.

Circular Economy

An economic concept centered on reusing, repairing, and recycling products instead of throwing them away.

Cost Leadership Strategy (Efficiency)

An SCM strategy aimed at achieving the lowest possible total cost using large production runs, global sourcing, high inventory turns, and lean operations, trading off flexibility.

Differentiation Strategy (Responsiveness)

An SCM strategy focused on reacting quickly and tailoring products to customer needs using short lead times and flexible manufacturing, trading off higher costs.

Lead Time

The total time that elapses between a customer placing an order and receiving delivery.

On Time In Full (OTIF)

A measurement of delivery reliability and service predictability where products arrive fully complete and as scheduled.

Resilience & Risk Management

The capacity to withstand and quickly recover from major disruptions using tactics such as safety stock, nearshoring, risk mapping, and multiple suppliers.

Material Flow

The physical movement of tangible goods along the supply chain, including raw materials, work in progress (WIP), and finished products.

Information Flow

The movement of data such as purchase orders, demand forecasts, inventory levels, and shipment tracking to facilitate coordination and decision-making.

Financial Flow

The movement of capital and financial data along the supply chain, covering invoices, credit terms, payment schedules, and working capital.