Upstream vs Downstream Supply Chain: What Are the Differences?

upstream vs downstream supply chain

You’ve probably heard of the term “supply chain management,” and you might wonder what it means for your business.

Managing the flow of goods throughout your business is essential to ensure all your customers are served quickly and efficiently. For there to be a “flow,” there must also be an “upstream” and a “downstream.”

A good understanding of the upstream and downstream supply chain will give you a better understanding of your business. It makes you a more knowledgeable business owner and improves the quality of your services.

Keep reading to learn the differences between the upstream vs downstream supply chain.

What Is a Supply Chain?

A supply chain is a collection of businesses, individuals, events, information, and assets used to carry materials from a supplier to a customer. It includes every step of the product’s marketing process. 

What Is Upstream Supply Chain?

An upstream supply chain is a supply chain that is involved in the sourcing and production of raw materials. In other words, it starts at the beginning of the production process and ends when products are ready for sale.

What Is Downstream Supply Chain?

The direction in which products go from one stage of their life cycles to the next is referred to as downstream. This is where raw materials, intermediate goods, and finished goods are sent to customers. Here, you must partner with a logistics company like Broekman Logistics to have an efficient and cost-effective downstream supply chain.

The Differences Between Upstream vs Downstream Supply Chain

There are differences between the upstream and downstream supply chains. For one, the upstream supply chain is more complex than the downstream supply chain. It’s because it involves more activities.

Upstream supply chains are part of the supply chain that includes raw materials suppliers. They also have components and finished products. Meanwhile, downstream supply chains are the part of the supply chain that consists of distributors, retailers, and customers.

The downstream supply chain is more customer-oriented than the upstream supply chain. The main aim of the downstream supply chain is to deliver the finished product to the customer at the right place and time.

Also, the upstream supply chain is more critical than the downstream supply chain. It will be hard to produce high-quality finished products if an upstream supply chain is inefficient. You won’t be able to meet the needs of downstream customers.

Make the Supply Chain Work!

The main difference between the upstream and downstream supply chains is each party’s level of control over the supply chain. Upstream supply chain members have more control over the supply chain than downstream members. 

Now that you understand how the upstream vs downstream supply chain differs, it’s important to note that although they serve different purposes in your business, they work together. Either one of them can’t be compromised.

Also, aim to have the best logistics partner for your business! It will lessen your worries, and they know how to handle the supply chain of your business.

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