Introduction It is the aim of every firm to maximize its profits and reduce costs while at the same time gaining higher market possession for its good or services. Most of the firms have traditionally concentrated on profit maximization concept and have therefore put a lot of effort on cost of raw materials and other inputs that are seen to be more important than anything else. But recently other aspects have been emerging as being also important in increasing efficiency in operations thus, reducing costs in a firm. Firms have realized that supply chain management play a key role in reducing costs as well as improving relationships with other players in the market, consequently increasing a firm’s competitive advantage. Definition Supply chain is the interconnection of organizations involving the flow of raw materials, finished products, finances and information that helps in facilitating production marketing and selling of goods and products. It can either be downstream where it starts from the supplier of raw materials and flows through the manufacturer to the retailer and lastly to the customer, or upstream where the point of emanation is at the customer then it passes through the retailer, manufacturer and finally at the supplier. Supply chain management is therefore, the management of the supply chain system to ensure smooth running and efficiency in the system hence benefiting from it (Horch 2009). Additionally, supply chain management involves inclusion of important factors that help in value addition to the customer as well as the involved organization. Importance of supply chains Manufacturers expect to get the raw materials at the right time, to ensure continuity in production process as interruption interferes with the availability of the commodity for delivery to buyers. On top of that, producers want to maintain as minimal inventory as possible to reduce storage costs, while the suppliers expect payment in good time to help them continue supplying. On the other hand, retailers and wholesalers want a stead supply of goods to ensure that they do not run short of any commodity, while the level of inventories is relatively low since huge inventory increases storage cost but bring no income (Bolstorff & Rosenbaum 2012). In conjunction to that, availability of the commodity within the customer’s reach at all times is very important not only in maintaining customers, but also in attracting new ones. All these expectations can only be achieved through proper and efficient management of the supply chain to ensure that the flow either downstream or upstream is uninterrupted timely and cost effective (Horch 2009). Supply chain and competitive advantage Ability of the firm to secure competitive advantage over its competitors enables the firm to emerge the winner during competition, and this can be achieved through proper management of the supply chain of the firm. Supply chain management requires that a firm carries out it’s competencies but outsource what requires specialization (Bolstorff & Rosenbaum 2012). Since Kellogg’s is not specialized in transportation issues, it hires TDG a logistics firm which has a lot of experience in this line of specialization. In addition, supply chain management facilitates turnover expansion through value addition where producers get involved in assisting the retailers to reduce their operation costs mostly thro