The four underlying concepts of supply chain management are supply, operations, logistics, and integration. Supply is the process by which firms purchase either their raw materials or intermediate manufactured goods for use by the firm. If the supply chain breaks down for instance; a supplier goes out of business or there is a shift in the demand curve for a certain supply. This would cause the firm to have to look for a new supplier, increased prices, or even a lack of manufactured goods to provide to their customers.
Operations are the process by which the company ensures that the correct number, amount, quality, cost, and customer service of product they are producing from the raw materials are made for the consumers. Failures in the operations process can lead to not enough products for the consumers, or have too much, which will cost more to warehouse the extra product. Logistics is how either the raw materials or intermediate manufactured goods come from the suppliers, or how the product the company is producing makes it to the consumers. Logistics also includes storage or the excess materials or product when excessive orders or production has occurred. Integration if the how the companies use and integrate the supply, operations, and logistics elements to complete their supply chain. Integration is how well the first three elements work together to have an impact over the profits or overcoming wastes in the supply chain.