Supply chain management is the oversight and facilitation of the people, processes, information, and technologies involved in the flow of goods and services from manufacturers and producers to customers and end users. The goal of supply chain management is to streamline these activities to ensure optimal efficiency and cost-effectiveness from start to finish, encompassing everything from production to product development, as well as the systems and processes utilized to direct these activities. 
When executed well, supply chain management enables organizations to eliminate wasteful spending, cut costs, and ultimately deliver products and services to the customer and end user more rapidly, without introducing errors and delays. To do this, supply chain professionals must maintain tight control over inventory (including both internal inventory and the inventories of company vendors), internal production, distribution, and sales.

The Three Levels of Supply Chain Management

The role of supply chain management is to oversee each touch point throughout this journey, from product development to the final sale to an end consumer. That means there are many junctures throughout the supply chain where organizations can add value through greater efficiency or lose value when expenses are increased without other factors that mitigate those increased costs.
Supply chain management, therefore, involves a variety of functions, processes, and activities. All of these things fall into one of three levels of supply chain management. Understanding these three levels makes it easier to grasp the scope of supply chain management as a whole:

• Strategic Planning – Strategic planning decisions, often made by upper management, are typically those that affect the organization as a whole rather than individual departments or functions, and they often involve long-term planning. For instance, the decision to open a new manufacturing facility or warehouse is a strategic decision, as well as the decision to explore new markets or develop new product lines. Strategic planning decisions are often the first step in developing and defining processes. Examples include how inventory and products are managed throughout the lifecycle, investments in IT solutions that can improve efficiency and/or accuracy, or choosing a site for a new business facility.
• Tactical Management – Tactical management decisions are where processes are actually defined, and these decisions play an important role in both minimizing risks and controlling costs. This level emphasizes consumer demand and aims to achieve the best value. Examples include obtaining procurement contracts for materials and services, developing production schedules, establishing guidelines for meeting regulatory standards, and warehousing and logistics decisions.
• Operational – Operational decisions should be made only within the context of strategic and tactical decisions that have already been established. Many businesses make the mistake of starting with operational planning without first addressing strategy and tactical planning and decision-making needs. The decisions made at the operational level impact the day-to-day operations of a business unit, department, or individual, and are designed to ensure the maximum cost benefit and overall efficiency of the supply chain – in short, the activities carried out and decisions made at the operational level are what keep the supply chain active. Operational processes include managing the flow of products and materials (both incoming and outgoing), managing inventory, overseeing production operations, and daily and weekly forecasting to inform decisions that enable the company to meet demands.

When planning and decision-making is conducted efficiently, with operational decisions made with an awareness of the broader strategic and tactical decisions, the supply chain functions more efficiently as a whole.