Supply chain is the networks among a company and its suppliers to produce and distribute product. It includes a series of steps for the company to produce and deliver the product to customers, such as procuring raw materials or secondary products, move and transform into finished products, transport and distribute the products to customers and end-users. Many entities are involved in the supply chain including producers, vendors, warehouses, transportation companies, distribution centres and retailers. And the functions in a supply chain incorporates product management, operations, marketing, distribution, finance, customer service, etc. In addition to the aforementioned steps and elements in supply chain, the supply chain processes are typically supply planning, product planning, demand planning, sales and operations planning.

Supply chain management is therefore an important process because it optimizes supply chains and increases the efficiency so as to reduce costs and enhance the production and distribution cycle for companies, thus increase the competitiveness of companies in the business landscape. Moreover, supply chains for a company are highly intercorrelated; if one link breaks down, it will cause ripple effect and affect the rest of the chains, causing costly and pervasive impacts to business operations and profitability. Hence it is crucial to establish good supply chain management and identify risks and events that might negative impact the supply chain of a company.