Supply chain management matches processes involved in producing, shipping and distributing products, chiefly with large suppliers. Net markets can open supply chain management to all trading partners regardless of size because they provide a center to integrate information from buyers and sellers. Supply chain management has three primary ambitions: decrease inventory, increase transaction speed by swapping data in real time, and increase sales by enforcing customer conditions more adequately. Supply chain management is an integrated approach to managing the flow of raw materials into an organization and the flow of finished goods out of the organization toward the consumer. As corporations try to focus on strengths and become more amenable, they have reduced their ownership of raw materials sources and distribution outlets. These duties are being increasingly outsourced to other corporations that can perform the activities better and more cost effectively.

The supply chain management can be further divided into three functions: The product function includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs. The information function involves transmitting orders and updating the status of delivery. The financial function consists of credit terms, payment schedules, and consignment and title ownership arrangements.

The two types of supply chain management software are planning applications and execution applications. Planning applications establish the most effective way to fill an order and execution applications track the physical status of goods, the management of materials, and financial information involving all parties. Some applications are based on open data models that support the sharing of data both inside and outside the enterprise. Called extended enterprise, this includes suppliers, manufacturers, and customers for a specific company. This shared data may reside in multiple database systems, or data warehouses, at many different sites and companies. By sharing this data upstream, with a company's suppliers and downstream, with a company's clients, supply chain management applications have the ability to increase the time-to-market of products, reduce costs, and allow all parties in the supply chain to better manage current resources and plan for future needs.