What Are the 5 Basic Steps of Supply Chain Management

global supply chain managements

On an international level, the global supply chain managements involves five general steps. Among these steps, several activities occur that entail coordinating between stakeholders in the chain. Typically, those in charge ensure smooth, organized, and active communication between stages. They see to it that undertakings from the manufacturer to the suppliers and the final customer destination are achievable. As such, on a local level, the processes in question might not be as complex as the global supply chain that incorporates multi-national trade. The chain has several links in-between that might vary from country to country, converging in the same business. In this article, you will familiarize yourself with the general overview of the steps in the global supply chain managements that you are bound to come across in most trades.

Global supply chain managements

First, it is logical that we read from the same leaflet- be on a similar page. So, let’s define terms here. Supply chain management is the process of initiating, supervising, tracing, and optimizing a distribution chain to the final step. When companies do such activities on an intercontinental level, the term global supply chain comes into play. Consequently, it pertains to the dispersion of goods and services on a transnational stage by a network of companies on different lands to maximize profit. Additionally, the coordination proceeds in a way that reduces the wastes at each link, which aids in minimization of loss.

Five steps in supply chain management

When discussing the steps involved in goods and service realization, most books you will read outline the following:

  • Planning
  • Sourcing or developing
  • Executing or manufacturing
  • Delivering
  • Returning 

The discussion below gives you a stepwise overview of what to expect at each level.


The foremost step that would help evaluate a feasible business venture is the planning process. The complexity of the chain increases with the number of links that are involved in the endeavor. global supply chain management deals with many terminals making its operation accrue many technicalities along the way. Generally, the aim of creating a plan is to realize the almost perfect blueprint of ensuring profit to the company and satisfaction to the clients.

The supply chain management board should be quick to identify crucial aspects of the business, for instance, strategic plant location and its size. Likewise, it creates a design for the warehouse, models for delivering products, and IT solutions selection. Moreover, identifying the other critical matrices like mode and cost of transportation is crucial. For local trades, it is a lesser hassle than on the international level. The global supply chain managements body decides between air and maritime transport.


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The board dealing with supply chain management have the task of identifying potential raw material suppliers. It is a critical step that will mean the success of product manufacturing. They weigh between possible companies that they can rely on to provide the materials continually during the company’s operation. Often, difficulties arise along the way, especially when it involves outsourcing services. The management has the duty to pinpoint the problems that arise and hasten to solve them. Some companies opt for contractual frameworks, which are renewable based on the performance of the supplying merchants. Building a strong bond between such businesses can aid in having several options to turn to incase one fail.


This step is the most metric-intensive phase in industrial processes. The aim of overseeing the execution is to ensure the production of market-acceptable goods and services. It is crucial to ensure that manufacturers at each unit adhere to procedures that will give rise to high-quality products. The items the company creates should be on demand by the consumers to ensure survival in the global market. At this juncture, designing, assembly, testing, and synchronizing the product occurs before delivering to the market.

The activities above are crafted by the supply chain management team, which schedules production processes. It ensures implementation of the design to the latter. As such, before releasing it to the consumers, they tailor the product totally with all the standard metrics on a global level.


Our fourth step is ensuring the products reach the consumers directly or through predetermined suppliers. The managers have the task of placing the goods and services in the correct amount, at the right time, to the appropriate client. Employing several carriers has been the best way to deliver the company’s items on an international scale. Global supply chain managements uses modern IT parameters to coordinate various transaction activities. Additionally, this stage involves several logistic inclusions that involve a network of firms collaborating in the business. Such include consignment firms, overseas warehouses, carriers, etc., which have to prepare receipts and invoices along the chain.


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Last, the return phase completes the supply chain. It is crucial in any business to make the customers feel satisfied with the service provision. Along the chain, anything can happen to the product making it unworthy for consumer use. Clients return such damaged or low-quality goods to the supplier. The quality of a product can be reduced by a problem with the process of manufacturing. The supply chain management has to instate a customer care service desk to deal with the inquiries and complaints from somewhat dissatisfied consumers.

Dealing with customer queries and complaints on products from companies is among the most daunting phases of a business operation. To respond to the client’s need for return goods, the supply chain management in some continents train their team on effective response style. Additionally, the coordinating body institutes a flexible network when it comes to accepting defective items and facilitating a satisfactory substitute.


Any supply chain management competently weighs between alternatives in each step to realizing the best feasible plan to pick. Such professionals ensure that the overall production process is cost-effective and efficient. Additionally, the supply chain coordinators should be flexible in strategizing the procedures for the provision of goods and services due to changing consumer needs. Moreover, the team has a duty to ensure any changes they make will realize the mission and goals of the company. Such would include realizing profitable solutions to the business without bypassing customer needs. , Integrating the advancements in technology in global supply chain managements has seen better communication and synchrony in business worldwide.

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