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Products and services are the result of the complex interaction of many individual value creators. Every enterprise has business connections with other participants of the supply chain suppliers, service providers, end customers. Supply chain management is the radical orientation of all activities along the value-added chain towards customer benefit.
The individual links of the supply chain typically are legally independent entities looking for the respective optimum for their companies. It is a fact, however, that the total of many individual optima does not guarantee an overall optimum output.
This is precisely where Supply Chain Management sets in: coordination along the whole supply chain to improve the overall performance and the overall costs to the benefit of everyone involved.