Supply affects the amount of resources that industries and units receive. Upgrades and units must have a friendly-held route to a military base, supply depot, or city. The larger the base or city, the greater supply it can provide to the surrounding territory. For peak production, an industry must be in full supply (i.e., 100%).
Supply is amplified by highways and railroads. Looking at the supply model (Hotkey S), one may notice that highways and railroads are more opaque than the surrounding territory, as they function like arteries in distributing supply. Highways are more effective than railroads in amplifying supply, and offer movement bonuses to units as well. The effectiveness of these highways and railroads is affected by a regionâ€™s level of Infrastructure funding, which can be found in the Interior panel.
Factors affecting supply levels
Sources of supply
Construction and build time
To build an upgrade, the hex it would be in has to be in supply. On ground hexes, this can be a rare problem in some isolated lands such as South West Australia's desert and, more commonly, on newly captured territory that has not built supply yet. On water hexes, many players forget the need for a sea base or pier. Not only do you need this during construction, but you need it to continue operating upgrades (oil derricks) and units.
The exception to needing supply in a hex is that Engineering units are able to build Air Strips, Sea Piers, Supply Depots and Emplacements in out-of-supply areas. Having multiple engineering units acting together will increase construction speed somewhat.
How fast structures are completed, their build time, is affected by the level of supply of the hex it is constructed in. For example, in an area at 45% supply, an industrial goods plant might take 83 days, while in an area at 90% supply it might take 63 days. At the extreme end, very little supply can make building in some barely-in-supply hexes close to impossible. This is true of roads, which can be completed much sooner near the better in supply region than the extremity to which you are building.
The amount of goods an upgrade can produce is affected by supply.
When a unit captures a hex, the hex doesn't provide supply right away; it needs time to build up. At least a day is needed to build any level of supply. Units are always using supplies, but in the time that they are in unsupplied territory, they dig into the supplies and petrol they carry with them. If out of supply too long, they can run out.
Units restock their supplies faster in an area of high supply. To gain supply as fast as possible in enemy territory, consider advancing along a highway or railroad and have infrastructure fully funded. Also, paradrops or seaborne invasions can be made on cities or military bases which become a self-sustaining source of supply.
When a unit runs out of supplies, it becomes unable to fire and its morale may lower (unconfirmed). If it is out of petroleum, it will be unable to move as well. Units out of supply are obviously very vulnerable, being unable to defend themselves. A common tactic employed by both players and the AI is to move behind a unit to cut its supply. When a unit is out of supply or nearly out, its HUD color will be red.
Units vary in their rate of supply and petrol consumption. Some of the heavier units, such as artillery and tanks, can quickly run out of supply in enemy territory. This is exasperated some technologies that increase ammunition consumption, notably the very popular ERFB-BB Ammunition (increased range) technology. Lighter units such as Light Infantry and LAVs/VABs use less supplies and can usually operate longer without supply, but this depends also on the amount of supplies and petrol they carry. An armored unit such as the VAB can actually move further over unsupplied territory than a light infantry unit because it carries almost twice as much petrol, but with very similar consumption rates.
Supply trucks and aircraft that have spare cargo capacity can be used to resupply units. Just move a one into the hex a unit that needs to be resupplied and supplies will transfer. To restock the truck or cargo aircraft, move it back to in-supply terrain and wait a bit.