The supply chain includes suppliers, the transformation process, distributors, and customers. Issues that need to be addressed in designing a company"s supply chain: sourcing, logistics and inventory management, vertical integration and outsourcing, measuring supply chain performance, product design to facilitate supply chain management. Strategic sourcing is the development and management of supplier relationships to acquire goods and services in a way that aids in achieving the needs of the business. Disintermediation eliminates the intermediaries which reduces costs and increases the contact between the vendor and buyer thus increasing the vendor"s understanding of the customer. The phenomenon of variability magnification in the manufacturer, distributor, wholesaler, and retailer chain is called the bullwhip effect. Indicates a lack of synchronization among supply chain members: the lack of information sharing, rationing, and gaming can cause the bullwhip effect as well. Benefits of continuous replenishment: retailer increases profits, retailer has more incentive to carry a broader line of products and give them more shelf space.