What is the difference between upstream and downstream in supply chain? (2023)

What is the difference between upstream and downstream?

Simply put, upstream works include the exploration and production of crude oil and natural gas, whilst downstream refers to the processes applied after extraction through to it being delivered to the customer in whatever format required.

Upstream activities include exploration, drilling, and extraction. Upstream is followed by midstream (transportation of crude oil) and downstream (refining and distribution) phases. Today many large oil companies are integrated, in that they maintain upstream, midstream, and downstream units.

Downstream supply chain operations involve the movement of finished goods from a business to its customers. These operations include distribution, order fulfillment and delivery.

What Is the Upstream Supply Chain? The upstream supply chain is the flow of materials necessary to expedite a production process. Upstream processes include outsourcing raw materials—such as plastics, woods, metals, and other more specific and intricate products—and production operating costs to create goods promptly.

An upstream company will search for raw materials and produce them by extracting them from the earth using drilling rigs. In contrast, a downstream company will refine these natural resources into usable products like gasoline.

It's not unusual to hear people involved in production make frequent reference to "upstream" and "downstream" parts of the process. Upstream refers to the material inputs needed for production, while downstream is the opposite end, where products get produced and distributed.

Downstream operations are the processes involved in converting oil and gas into the finished product. These include refining crude oil into gasoline, natural gas liquids, diesel, and a variety of other energy sources.

The downstream part of the supply chain includes processes used to create finished goods and the distribution and sale of the goods. Downstream operation sales may be wholesale, business-to-business sales or retail sales to end consumers.

The upstream portion of the supply chain includes the organization's suppliers and the processes for managing relationships with them. The downstream portion consists of the organizations and processes for distributing and delivering products to the final customers.

Procurement Process: Upstream and Downstream

Simply put, the upstream procurement process is everything that happens from sourcing to awarding the contract. Downstream procurement is everything that happens after the contract is awarded.

What are the 5 types of supply chain?

What is downstream logistics? Overall, downstream logistics refers to any logistic activities aiming to provide customers or end consumers with finished products.

Definition of downstream

1 : in the direction of or nearer to the mouth of a stream floating downstream located two miles downstream. 2 : in or toward the latter stages of a usually industrial process or the stages (such as marketing) after manufacture improving profits downstream downstream products.

Upstream marketing focuses on creating long-term goals and considers the future of the business. In contrast, downstream marketing looks at current customer needs and sets goals that are reachable in a short period of time.

'Upstream' is about extracting oil and natural gas from the ground; 'midstream' is about safely moving them thousands of miles; and 'downstream' is converting these resources into the fuels and finished products we all depend on.

Definition of upstream

1 : in the direction opposite to the flow of a stream. 2 : in or to a position within the production stream closer to manufacturing processes make most of its money upstream, selling cheap crude … to refineries— John Quirt.