The Importance of Supply Chain Management: The most underrated or misinterpreted aspect of a business is Supply Chain Management(SCM). The supply chain (SC) of any business or organization can be global or multi-national, local or quaint. However, it effectively manages the flow of products and information within the businesses. Above all, it controls the flow of capital in a business. The field of SCM has grown tremendously over the past few years. Hence, it plays an integral part in every business as it ensures a smooth flow between different functions of the company. Consequently, it boosts customer satisfaction and enhances the growth of the business.
Supply chain managers are responsible for quickly dispersing the products to stay in the inventory and increase the holding costs. The managers should ensure that the raw materials and other parts of products are reached on time. Managers should not delay the production phase at any cost. Further, to reduce the overall cost optimize the warehousing and storage. In addition, automating the warehouses can enhance streamline processes, efficiency and thereby reduce labor costs as well. Perhaps, this would help the company to stay ahead in the competitive local and international market.
The supply chain performance of any organization is the hidden weapon to augment customer satisfaction and enhance profitability. Lowering retail prices, improving service quality, and delivering products at right time are some of the ways by which a business or organization can influence the customers. Further, influence the customers in such a way that in future they become more curious to buy the products from your organization. For instance, customers won’t be happy if the pizza they ordered takes two hours to be delivered or the sofa for their new house was delivered after 10 weeks. In such instances, the organization should show transparency in explaining to the customers why the issues occurred and must fix them appropriately. Therefore, implement a supply chain system that reduces errors and improves inventory efficiency, and boosts customer satisfaction.
A supply chain manager has the right leadership skills and knowledge to reduce procurement and delivery costs, which will, in turn, benefit the company. Moreover, they can redesign the process and find better deals on fixed assets including transportation, warehouse, and inventory costs. If by making certain changes, your company reduces the number of warehouses from eight to six, you will be saving a lot of money, indeed.
On the other hand, managers are responsible for delivering products in the shortest time possible. Therefore, the company will receive payments faster during the delivery of products. For instance, If an apparel company takes 10 days to deliver a product from Dubai to Turkey, the manager can devise a plan that cuts down the number of days to just five.
The goal of every supply chain system is to minimize the processing cost, energy utilized, and other resources. Humans and vehicles are the two crucial assets of all supply chain activities. Every organization or business should implement energy-efficient strategies to maximize productivity by using fewer resources. Consequently, it would improve profitability, quality, and competitiveness. One of the major drawbacks of supply chain activities is that it generates cardboard wastes and carbon dioxide fuel emissions due to product packaging and transportation. Therefore, the supply chain manager should implement sustainable methods and processes to reduce the depletion of energy and resources.
By optimizing a company’s supply chain, it creates new employment opportunities as they need employees to fulfill different roles in multiple phases of the process. It includes transportation, warehousing, packaging, and collecting logistics information. For example, there are over 10 million supply chain-related jobs in the US, which indicates the importance of the supply chain system across the globe.
One of the biggest advantages of a supply chain system is that it boosts the local and national economies. Supply Chain Management is the foundation for economic growth in businesses. Only a society or a nation with a well-developed supply chain infrastructure is capable of exchanging numerous goods between consumers and businesses at a low cost within a lesser time. A highly developed Supply Chain infrastructure includes modern ports and airports, a modern interstate highway system, and a vast railway network. However, the economy of societies with poor SC infrastructure remains dull. Therefore, investing in a strong supply chain system will reap long-term benefits in our business.