Last Reviewed: July 2026
The United States supply chain accounts for 37% of the country’s jobs, making it an important part of the economy (Harvard Business Review, 2018). Behind each purchase, a complex network of businesses works to source raw materials so that they can be manufactured, packed, and shipped to consumers. Through supply chain management, businesses can plan and coordinate each step involved in taking a raw material and transforming it into a finished product.
This guide is for anyone new to supply chain management, including students exploring the field and professionals considering a degree. It explains what supply chain management is, its core functions and stages, its benefits, and the careers and degrees connected to it.
At a Glance
- Supply chain management involves the coordination and control of goods as they move through the supply chain.
- The core functions of supply chain management are planning, sourcing, manufacturing, delivery, logistics, and reverse logistics.
- Through better supply chain management, companies can reduce costs, minimize risks, improve sustainability, increase efficiency, boost customer satisfaction, and achieve a competitive advantage.
- With a degree in supply chain management, students can pursue careers as supply chain analysts, inventory managers, supply chain directors, logistics managers, and procurement managers.
What Is Supply Chain Management?
Supply chain management is the process of coordinating the people, materials, processes, and technology necessary for transforming raw materials into finished products and transporting them to the customer. An entire network of suppliers, manufacturers, distributors, retailers, and logistics professionals must work together to efficiently move products.
Core Functions of Supply Chain Management
Different parts of the supply chain are responsible for planning, sourcing, manufacturing, production, delivery, logistics, and reverse logistics. Each of the following functions plays a role in making sure products get from the start of the supply chain to the end user.
- Planning: From forecasting demand to production planning, the planning stage is essential for scheduling production, obtaining materials, and allocating resources. Through better planning, companies can avoid stockouts and excess inventory.
- Sourcing: This supply chain function involves supplier relationship management, contract negotiations, vendor management, and the procurement of raw materials.
- Manufacturing and Production: During this stage, businesses convert raw materials into the finished product. Supply chain managers must monitor inventory levels, coordinate with operations managers on production schedules, and work with operations teams.
- Delivery and Logistics: Delivery and logistics encompass warehousing, transportation, inventory management, and order fulfillment.
- Reverse Logistics: This step involves the handling of returns, warranty claims, product repairs, disposals, recalls, and refurbishment. Processing returns is necessary for recovering value and reducing waste, which is especially important in industries with high return rates. According to the National Retail Federation, around 19.2% of online purchases are returned in a year (2025).
If this topic resonates with you, check out our supply chain career quiz to find out which one of the eight career archetypes fits your personality.
How the Supply Chain Works
While each product involves different materials, production processes, and distribution networks, the basic supply chain flow typically proceeds through six main stages.
| Stage | What happens |
|---|---|
| Raw materials | Businesses source and procure the materials needed to make goods |
| Manufacturing | Raw materials are converted into the final product |
| Warehousing | Finished products are stored until they are shipped |
| Transportation | Products are shipped to stores, distribution centers, or customers |
| Retail | Products are sold in a physical store or online |
| Customer | The customer receives the product |
The Advantages of Effective Supply Chain Management
Through better supply chain management, businesses can optimize their efficiency, costs, and customer satisfaction levels. In addition to mitigating risks, effective supply chain management can help businesses achieve a competitive advantage.
- Increased Efficiency: Inventory management, transportation optimization, warehouse management, and other supply chain improvements can boost your organization’s productivity.
- Reduced Costs: Through better technology, processes, and planning, businesses can avoid waste and decrease their operating costs.
- Improved Competitive Advantage: With a more efficient, cost-effective approach, companies can be more responsive to industry trends and changes in customer demand.
- Enhanced Risk Mitigation: According to the United States Census Bureau, domestic supplier delays affected 14.5% of businesses in July 2023. Through supply chain management, companies can better mitigate supplier delays, geopolitical risks, labor shortages, and other supply chain risks.
- Better Customer Satisfaction: When quality materials and products are shipped, produced, and delivered on time, it leads to higher levels of customer satisfaction.
- Improved Support for Sustainability: Many organizations have environmental goals. By improving their supply chain, these businesses can lower emissions and minimize waste.
Careers in Supply Chain Management
To get a better idea about what it’s like to work in this industry, check out some of the responsibilities and median salaries associated with popular supply chain careers (Association for Supply Chain Management, 2025).
| Career | Responsibilities | Salary (Median) |
|---|---|---|
| Supply Chain Analyst | Analyze data to improve supply chain processes | $85,000 |
| Procurement Manager | Oversee a company’s purchasing operations | $128,000 |
| Inventory Manager | Manage stock levels | $95,900 |
| Logistics Manager | Oversee an organization’s transportation, warehousing, fulfillment, and distribution | $109,500 |
| Supply Chain Director | Design and supervise a company’s supply chain strategy | $160,000 |
Do You Need a Supply Chain Management Degree to Get Hired?
While you might not be required to have a degree for every supply chain position, going to college can provide you with a competitive advantage over other job applicants. For example, one of my friends has spent a decade working as a warehouse manager and has spent the last few years angling for a promotion. His internal applications keep getting turned down because he has an associate’s degree, but advanced positions prefer applicants with a bachelor’s or master’s degree.
Degrees are common requirements for leadership and advanced positions. Many employers, for instance, expect supply chain analysts, operations managers, procurement specialists, and logistics managers to have a degree.
Besides being a requirement for many roles, a degree is important because it provides the skills and knowledge you need to succeed in the industry. Students can gain practical skills through coursework on data analysis, global supply chain management, business statistics, inventory management, and enterprise resource planning (ERP) systems. In addition, your college’s professional networking, internship, and mentoring options can make finding opportunities easier.
Frequently asked questions
What is supply chain management?
Supply chain management is the process of coordinating the people, materials, processes, and technology that turn raw materials into finished products and get them to customers. It spans planning, sourcing, manufacturing, delivery, logistics, and returns.
What are the core functions of supply chain management?
The core functions are planning, sourcing, manufacturing and production, delivery and logistics, and reverse logistics, which covers returns, repairs, and recalls.
What are the stages of a supply chain?
A typical supply chain moves through six stages: raw materials, manufacturing, warehousing, transportation, retail, and the customer.
What are the benefits of good supply chain management?
Done well, it lowers costs, increases efficiency, improves customer satisfaction, strengthens competitive advantage, supports sustainability, and reduces risk from delays and disruptions.
Do you need a degree to work in supply chain management?
Not always, but a degree gives you an edge, especially for leadership and advanced roles like supply chain analyst, operations manager, and logistics manager, which often require one.
Find a Career Path in Supply Chain Management
If you’re pursuing a degree in supply chain management, it helps to know what type of career matches your personality. With our supply chain quiz, you can match your skills and traits to a career archetype. For example, someone who cares about fixing problems and improving inefficiencies matches the excavator archetype. In comparison, the sentinel is someone who excels at following regulations and understanding each region’s compliance requirements.
Interested in learning more? Take our 12-question supply chain quiz to match your personality to one of our eight career archetypes.