Supply Chain Management & It’s Important

Supply chain management covers the management of the flow of goods and services, the movement and storage of raw materials, process inventories, and finishing of finished goods, as well as the sequence of point-to-fulfillment.

In recent times, the dawn of the digital age has brought wholesale transformation to the world of commerce. Only twenty years ago, these processes were arduous, labour intensive, time-consuming and disorganized. It may seem like ancient history, delivery times have gone two weeks to a month down to turnaround of hours. Automated systems and high-speed communication have paved the way for supply chain management and its increased demand.

Why is Supply Chain Management So Important?

Today, more than ever before, Supply Chain Management solution has become an integral part of the business and is essential to any company’s success and customer satisfaction. Supply chain management has the power to boost customer service, reduce operating costs and improve the financial standing of a company, but how does this work?

Improve Customer Services

• Products need to be on hand in the right location. Customer satisfaction is tarnished if your car’s brake pads fail and the auto repair shop is delayed in making the repairs because parts are not available in-house.
• Follow up support after a sale must be done quickly. When an appliance store sells a furnace with a warranty and it breaks down when temperatures are below freezing, it is a great possibility the customer will be irate if the heating unit cannot be fixed immediately.

Reduce Operating Costs

• Decreases Purchasing Cost – Retailers depend on supply chains to quickly distribute costly products to avoid sitting on expensive inventories.
• Decrease Production Cost – Any delay in production can cost a company tens of thousands of dollars. This factor makes supply chain management ever more important. Reliable delivery of materials to assembly plants avoids any costly delays in manufacturing.
• Decrease Total Supply Chain Cost – Wholesale manufacturers and retailer suppliers depend on proficient SCM to design a network that meets customer service goals. This gives businesses a competitive edge in the marketplace.

Improve Financial Position

• Insert Profit Leverage – Businesses value supply chain managers because they help control and decrease supply chain expenditures.
• Decrease Fixed Assets – Supply chain managers decrease the use of large fixed assets such as plants, warehouses and transportation vehicles, essentially diminishing cost.
• Increases Cash Flow – Firms appreciate the added value supply chain management contributes to the speed of product flows to customers.

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