1. The upstream industry originally refers to the industry at the beginning of the whole industrial chain, including the extraction of important resources and raw materials, the supply industry, and the manufacturing and production of parts and components of the industry, which determines the speed of development of the other industries, and is characterized by basic, raw materials, and strong links. In the modern industry chain theory, the upstream industry is a relative concept.

2. The downstream industry refers to the industry at the end of the whole industrial chain, processing raw materials and components, manufacturing finished products and engaged in production, service industry.

According to the Smile Curve Theory, the upstream is often relatively lucrative, slow competition in the industry, the reason is that the upstream is often in control of some kind of resources, such as minerals, or mastery of the core technology, there are high barriers to entry into the industry, so many investors prefer the upstream industry stocks. For industries to develop a competitive advantage, there can be no shortage of world-class suppliers or close cooperation between upstream and downstream industries.

Expanded Information

Management Points:

1, the supply chain is a unidirectional process, the links in the chain is not divided from each other, but through the chain of linkage to become a whole.

2, the supply chain is the whole process of strategic management, from the overall consideration, if only rely on part of the link information, due to the limitation or distortion of information, may lead to planning distortion.

3, different chain on the inventory view is different, in the logistics of the supply chain management, not as a measure to maintain production and sales of inventory, but as a supply chain balance mechanism.

4, the supply chain management to take a new management approach, such as the overall integrated approach instead of the interface approach, with the lifting of the weakest chain to seek a total balance, with the simplification of the supply chain method to prevent the accumulation of signals amplified by the economic cybernetics approach to achieve control.

Baidu Encyclopedia - Upstream Industry

Baidu Encyclopedia - Downstream Industry

Baidu Encyclopedia - Supply Chain