Supply Chain Process: From Planning to Returns
by Jaidyn Farar
When every step of the supply chain process runs smoothly, your business will gain and retain customers more easily. On the other hand, delays and mistakes tend to frustrate shoppers—and convince them to turn to competitors.
In this article, you’ll learn how to keep each link of your supply chain efficient and cost-effective.
Introduction to the supply chain process
Supply chain, supply chain process, and supply chain management; while these terms are closely related, they all have distinct meanings. Let’s walk through each one.
What is a supply chain?
Supply chains are networks of businesses, individuals, and processes involved in creating products and delivering them to end customers. These networks are made up of raw material suppliers, manufacturers, transportation companies, wholesalers, retailers, and customers.
The goal of every supply chain is to make products available in the right quantity, at the right time, and at the right location.
What is the supply chain process?
The supply chain process is the series of steps required to move goods from their point of origin to the customer. This includes planning, procurement, manufacturing, inventory management, distribution, and returns processing.
By streamlining each stage of the process, from sourcing materials to managing last-mile delivery, you’ll keep your operations efficient and your customers satisfied.
What is supply chain management?
Supply chain management (SCM) is the practice of overseeing and optimizing the entire supply chain process. This includes managing relationships with suppliers, monitoring inventory, coordinating logistics, and leveraging technology. Businesses that take a proactive approach to SCM are often able to minimize the impact of disruptions and build strong relationships with their supply chain partners.
Stages in the Supply Chain Process
The six stages of the supply chain process are planning, procurement, manufacturing, inventory management, distribution, and returns processing.
After reading about each stage, check out the linked resources for more information, including tips from expert guests on the Unboxing Logistics podcast.
1. Planning
Planning is the foundation of the supply chain process, and it all starts with demand forecasting.
Before manufacturing and distributing products, you need to know how many you can expect to sell. Otherwise, you might stock out of popular items or end up with warehouse shelves full of dead stock.
Demand forecasting is the process of predicting how much product will be needed over a given period. For the most accurate forecasts, you should analyze both internal and external factors. In addition to using historical sales data to predict future sales, remember to consider things like customer behavior, market trends, and competitor activity.
A solid supply chain plan should also outline procurement strategies, production schedules, and logistics timelines. Just remember to build flexibility into your plan to account for unexpected disruptions, such as supplier delays or spikes in demand.
“The biggest thing that an organization can do to be resilient is to improve the quality of the people and get them thinking in a resilient mindset. You don't have to train for every potential type of disaster or event. It's the idea of being able to react to events, process them, set up the communication, make decisions.” — Chris Caplice, Supply Chain Trends in 2025
Effective planning sets the foundation for a well-oiled supply chain that can adapt to changes quickly.
- Article: What Is Supply Chain Forecasting? Let’s Break It Down
- Article: What Is Demand Forecasting? A Comprehensive Guide
2. Procurement
Procurement, or sourcing, is the process of obtaining the raw materials, components, or finished goods needed for your operations. A strong procurement strategy balances affordability with quality and ensures that your supply chain remains sustainable and ethical. This stage involves several steps:
- Finding reliable suppliers
- Negotiating contracts
- Fostering good supplier relationships
- Making sure the materials or goods meet quality and quantity requirements
- Tracking orders
- Monitoring costs
Your business will rely heavily on suppliers, so it’s essential to choose partners who communicate promptly and meet your agreed-upon standards of timeliness and quality.
But even the best partners may fall short, sometimes through no fault of their own.
To avoid the pitfalls that come with over-reliance on a single source, diversify your supplier base. Choose backup suppliers that you can turn to if a main partner faces delays, and consider choosing partners located close to your facilities to avoid the problems that can come with long transportation routes.
- Podcast episode: Building Better Supplier Relationships With Jill Barron From Summit Advisory Team
- Article: Building Relationships With Suppliers—The Right Way
3. Manufacturing
During the manufacturing phase, raw materials or components are transformed into finished products. This step of the supply chain process covers everything from production planning and scheduling to quality control and assembly.
Efficient manufacturing relies on clearly defined workflows, skilled labor (which requires consistent employee training), and the right technology.
One of the most crucial considerations during manufacturing is quality assurance; you should implement strict standards to ensure that every product meets customer expectations. By conducting regular quality inspections and testing at various points in the production cycle, you’ll reduce waste, improve productivity, and maintain a consistent standard of excellence.
4. Inventory management
Inventory management involves overseeing the storage, movement, and tracking of goods throughout your supply chain. This includes managing raw materials, work-in-progress (WIP) inventory, and finished products. The goal of inventory management is to strike a balance: keeping enough stock on hand to meet demand without overstocking.
To get inventory management right, consider investing in inventory management software or integrating this functionality into your warehouse management system (WMS).
- Podcast episode: Ecommerce Inventory and Labor Challenges With Steve Syverson From NFI eCom
- Article: Inventory Management: Benefits, Process, and Best Methods
5. Distribution
Distribution focuses on getting finished goods into the hands of consumers, either through in-store shopping or online ordering. As the touchpoint between your business and buyers, it’s one of the most important steps in the supply chain process.
Whether you’re delivering directly to customers or shipping to retail locations, the goal of distribution is to move products quickly, reliably, and cost-effectively.
When shipping to customers, you have a variety of order fulfillment strategies to choose from:
- In-house. With in-house fulfillment, you keep logistics functions within your business, allowing you to retain full control over storage, picking, packing, shipping, and returns.
- Third-party. When you partner with a third-party fulfillment provider, or 3PL, you outsource order fulfillment to them. Your products are stored in their distribution centers, and 3PL employees take care of picking, packing, and shipping.
- Dropshipping. In a dropshipping model, your suppliers ship orders directly to customers. This eliminates the need for your business to store inventory and handle fulfillment tasks.
- Hybrid. A hybrid model combines in-house fulfillment, third-party fulfillment, and/or dropshipping.
To improve the efficiency of your distribution, consider diversifying your fulfillment network; for example, you might use regional warehouses or micro-fulfillment centers to reduce delivery times.
Additionally, make sure to optimize last-mile delivery with shipping tools that provide real-time tracking and updates to customers, improving transparency and trust.
- Podcast episode: Tips for Last-Mile Success With Nicholas Daniel-Richards From Packiyo
- Article: Understand Direct-to-Consumer (DTC) Fulfillment
6. Returns processing
Returns processing, or reverse logistics, is all about managing the flow of goods from the customer back to your business. It covers everything from receiving returned products and inspecting them to deciding whether they can be restocked, refurbished, or recycled.
While returns might feel like an unnecessary hassle, remember that a smooth returns process is essential for maintaining customer satisfaction. But it's not just about keeping customers happy—a great returns management strategy also helps you recapture value from returned items.
- Podcast episode: The Future of Returns With Eric Wimer From Sway
- Article: 6 Ways To Improve Your Returns Management Process
Supply chain process example
What do supply chain processes look like in practice? Let’s look at a hypothetical example of a company that specializes in hiking and camping gear. As they prepare to launch a new lightweight, waterproof hiking backpack, here’s how the supply chain process might unfold:
- Planning. The company starts by analyzing sales data, customer feedback, and market trends to forecast demand for their new hiking backpack. They plan to produce 10,000 units initially, taking into account seasonal spikes in hiking gear sales during spring and summer.
- Procurement. The company sources waterproof fabric and lightweight aluminum frame components from two trusted suppliers. They negotiate contracts and place orders well in advance to avoid delays during the peak production season.
- Manufacturing. Next, materials are sent to a manufacturing facility where the backpacks are assembled. Workers conduct quality control checks on every batch to make sure the backpacks are durable and waterproof.
- Inventory management. Once produced, the backpacks are stored in the company’s regional warehouses, where inventory management software tracks stock levels in real time.
- Distribution. When customers place orders online, the backpacks are picked, packed, and shipped from the closest distribution center to keep delivery times short. The company also sends large shipments to outdoor equipment stores across the country using freight services.
- Returns processing. If a customer discovers that the backpack doesn’t meet their needs, they can initiate a return through a convenient online portal. Staff members inspect returned backpacks, deciding whether to restock, repair, or recycle them.
How to optimize your supply chain
Is your supply chain operating as efficiently as possible? By prioritizing resilience and sustainability—and using the right technology—you’ll reduce costs, improve customer satisfaction levels, and scale your business more quickly.
Focus on resilience
In general, global supply chains bounce back quickly from disruptions. But your company won’t be able to say the same unless you proactively take steps to increase supply chain resilience. Consider the following ideas:
- Diversify. Expand your supplier base, avoiding over-reliance on a single source for essential parts and materials.
- Plan ahead. Develop contingency plans for common disruptions, such as natural disasters, supplier delays, or transportation issues.
- Stock up. A just-in-time inventory management strategy can be risky during a time of economic uncertainty and geopolitical conflict. Consider maintaining safety stock so you’re not left scrambling if a supplier doesn’t deliver on time.
Prioritize sustainability
Proving that you take sustainability seriously will help you attract and retain customers, employees, and investors. And while the journey to eco-friendly practices can seem arduous, you have plenty of opportunities to go green at every stage of your supply chain.
Get started by sourcing eco-friendly materials, reducing waste, and optimizing transportation to lower carbon emissions. Partner with suppliers who share your commitment to sustainability, and make sure they adhere to ethical labor and environmental standards.
“Sustainability has gone from being a nice-to-have, to now being a business imperative.” — Tom Raftery, 2025 Supply Chain Sustainability Trends
Leverage technology
Finally, optimizing your supply chain requires the right technology. As your business scales, make appropriate investments in tools like supply chain management software, demand forecasting systems, shipping platforms, analytics tools, and real-time tracking solutions to improve visibility and efficiency across every process.
Simplify your supply chain with EasyPost Enterprise
As the touchpoint between your business and buyers, order fulfillment is one of the most important steps in the supply chain process. To keep customers coming back, you need a shipping process that’s affordable, reliable, and timely—and that’s why major organizations have turned to EasyPost Enterprise.
EasyPost Enterprise offers a suite of solutions designed for high-performance shippers: a shipping platform, advanced analytics software, consulting services, and more.
Get in touch to learn how EasyPost Enterprise can streamline your fulfillment process.