Supply chain generally includes material circulation, commercial circulation, information circulation and capital circulation. The four processes have different functions and different circulation directions.

Material circulation

This process is mainly the circulation process of materials (commodities), which is a procedure of sending goods. The direction of the process is from suppliers to consumers through manufacturers, wholesale and logistics, retailers and so on. For a long time, the theory of enterprise is based on the products, so the material flow is widely valued. Many logistics theories involve how to deliver goods at low cost in a short period of time in the process of material circulation.

Commercial circulation

This process is mainly the circulation process of sales, which is the business process of accepting orders and signing contracts. The direction of the process is two-way flow between suppliers and consumers. Commercial circulation forms tend to be diversified: there are traditional store sales, door-to-door sales and mail order, and e-commerce forms of shopping through the Internet and other emerging media.

Information flow

This process is the flow of goods and transaction information. The direction of the process is also bidirectional flow between suppliers and consumers. In the past, people tend to focus on the visible objects, so the flow of information has been ignored. Some people even think that the backwardness of national logistics has something to do with the fact that they put too much money into material processes and delay the grasp of information.

Capital flow

This process is the circulation of money. In order to ensure the normal operation of enterprises, it is necessary to ensure the timely recovery of funds, otherwise enterprises will not be able to establish a sound business system. The direction of the process is from consumers to suppliers through retailers, wholesale and logistics, manufacturers, etc.