The Dairy Crest manufacturing plant receives raw material from a variety of suppliers who may themselves have been supplied by lower tier suppliers.

For example, packaging material may come from Nampak packaging while Nampak receives raw materials to manufacture the packaging from other suppliers.

A supply chain is dynamic and involves the constant flow of information, product, and funds between different stages.

In our example, the retailer provides the product, as well as pricing and availability information, to the customer.

The customer transfers funds to the retailer.

The retailer conveys point-of-sales data as well as replenishment order via trucks back to the store.

The retailer transfers funds to the distributor after the replenishment.

The distributor also provides pricing information and sends delivery schedules to the retailer.