A: Depending on the type of merchant, a supply chain can begin in several different places and take several different forms. However, a supply chain typically ends either in a distribution center, where products are processed and shipped to customers, or on the store shelf.
Some supply chains start on farms where farmers produce raw materials. Brands that manufacture their own goods must start by sourcing raw materials from producers and then coordinate the distribution of those goods to manufacturing sites. Manufacturers turn raw materials into finished products. Then, distributors work to send the finished goods to the right places, at the right time, and in the right quantities — a process called order fulfillment. Other supply chains start with manufacturers or brand warehouses that purchase finished goods without having to worry about handling raw materials.
Merchants, like grocery stores and some retailers, may employ a hybrid supply chain model. They may purchase portions of goods from manufacturers, while also working with other specialized manufacturers for raw materials to create private label products.
These approaches both have benefits and disadvantages. For example, if a retailer doesn’t start with raw materials, they often can’t control manufacturing processes, schedules, or product offerings. On the other hand, these same retailers have the opportunity to buy from many different vendors and offer a wider variety of products to end users.