Supply Chain Optimization

Definition - What does Supply Chain Optimization mean?

Supply chain optimization is the study of how to optimize a manufacturing or industrial supply chain using strategies and resources. There are various kinds of supply chain optimization that work in different ways to enhance what companies do to move items through the supply chain.

Techopedia explains Supply Chain Optimization

Some types of supply chain optimization tools are largely predictive, where others may contemplate hypothetical scenarios. In general, supply chain network optimization is often described as a type of optimization based on analyzing hypothetical or "what-if" scenarios.

Supply chain optimization can be applied to the entire life cycle, from the intake of raw materials to the discrete manufacturing process, as in "end to end supply chain management" which proceeds to the final step of delivering final products to customers.

One way to think about supply chain optimization is to consider how artificial intelligence or business intelligence tools can reveal how raw materials are used, and how supply chains work. This could involve automatic tagging of vendors and raw material products, tracking of manufacturing builds, and much more.

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