In business terminology, supply chain is the name given to a network of facilities and distribution options that perform the functions of sourcing materials, transforming them into intermediate and finished products, and subsequently distribution of these finished products to customers. While it may seem like supply chains are only important to manufacturing industries, they also exist in service industries. The actual level of its complexity can, however, vary greatly from industry to industry and company to company. Traditionally, marketing, distribution, planning, manufacturing and purchasing organizations along the supply chain operated independently. The goals of these organizational divisions are always different and in conflict with the goals of others. . Marketing places greater emphasis on high customer service, and maximum revenue conflicts with production and distribution goals. Many manufacturing operations are designed to maximize productivity and reduce costs, with little consideration for the impact on inventory levels and distribution capabilities. Purchase contracts are often negotiated with very little information beyond historical purchasing patterns. The result of these factors is that there is no single integrated plan for the organization: there were as many plans as there are companies. Clearly, a mechanism is needed by which these different functions can be integrated together. Supply chain management is one strategy through which such integration can be achieved. Supply chain management is generally considered between fully vertically integrated companies, where the entire material flow is owned by a single company, and those where each channel member operates independently. Therefore, coordination between the various actors in the supply chain is fundamental for its effective management. For a supply chain to function efficiently, all the different divisions of the supply chain must operate in harmony. The most important relationship in this chain is between adjacent departments. They must work smoothly so that the task can be transferred from one to the other. But for the entire chain to work effectively, a coordinated effort must be made to achieve this goal. There are two types of decisions relevant to supply chain management: strategic and operational. Strategic decisions are always made over a longer period of time, usually in years. These decisions parallel business strategy and drive supply chain policies from a design perspective. Operational decisions, on the other hand, are short-term and focus on day-to-day activities. Operational decisions serve to manage the flow of the product so that it conforms to the strategically planned supply chain.