Understanding upstream activities
Upstream activities are those that occur before the firm – that is, the operations of a firm’s suppliers. The production of the inputs to the company are thus all upstream of the firm, and there may be multiple stages of upstream activities prior to the company.
Examples of upstream activities
Some examples of upstream activities are:
- The extraction of oil and gas is upstream of the refining stage
- The smelting of metals is upstream of subsequent metal processing stages
- Mining metals is upstream of metal smelting
- Growing crops is upstream of food processing