As air travels through the air lines, the friction of the air moving along on the inner wall of the air line slows the air at the outside of the air stream, and the air in the middle moves faster as a result. This creates turbulence. Turbulence contributes to pressure drop.
Then, every fitting, every orifice the air travels through, every leak point the air travels past, slows the travel of the air and reduces the pressure that can be delivered. If air is moving more slowly, it takes longer to come up to pressure at a specific location. If that application is using air faster than it can arrive, the results of pressure drop is that the application will starve for air.
As air moves from the compressor receiver or discharge through the plant mains, typically the air lines reduce in size, this helping ensure that the air pressure to the application is sufficient as long as the line size provides sufficient flow for the application.
In a system that is designed and built correctly, between the compressor discharge and point of use, the norm is to see a 5-10 PSI drop. If you are seeing more pressure drop in your air lines than that, there is likely some problem with your compressed air plumbing.