Importance of Supply Chain Management
We know that as a modern business owner, your customers’ experience is of the highest priority. But how do you make sure that you have eyes on every step of your product’s journey? It’s important to you to make sure that your materials are sourced from the right places, that your production is ethical, and that you have visibility of each step of the pipeline that gets your product to your customers. But how do you track and monitor these stages? In today’s world of data-driven solutions and analytics-based decision making, the management of your supply chain is critical in maintaining your advantage over your competitors. As supply chain management is only a recent development in business planning, we have put together a one-stop information drop for you and your business, letting you know exactly how your business can benefit from supply chain management and its associated processes.
What is Supply Chain Management?
Supply chain management (or SCM) is the tracking of a product’s entire life cycle, from planning its production right up until it is placed in the hands of a happy customer. This manages and coordinates all the processes involved in a product’s journey, from the inception of the idea to its use by the customer. Successfully implementing SCM in your business will rely on business strategy and planning, integrated software, and collaboration. As this is a wide-ranging and intricate system, the cooperation of all shareholders in the system – from supply to delivery – is crucial in building an effective SCM solution. We are experts in the field of supply chain management solutions, and can aid you in finding an SCM that works perfectly for you.
What is the Difference Between Supply Chain Management and Supply Chain Risk Management?
Although running a lean, excess-less supply chain is the goal of any business, it means that you have less margin for error when things go wrong (“No risk it, no biscuit” as Super Bowl-winning coach Bruce Arians is fond of saying.) These errors can be identified in the process of supply chain risk management, an examination of the potential for problems in your end-to-end supply chain. Where supply chain management oversees all aspects of your product journey, SCRM specifically looks for areas that hold the most potential for problems within your supply chain.
What are the Five Steps of Supply Chain Management?
Traditionally, we identify five pillars of supply chain management. These help to break down the process into easily workable chunks, which can be monitored separately to more easily identify risks, flaws, and bottlenecks. The pillars are generally defined as follows:
Businesses use enterprise resource planning to map a product’s journey from raw materials to end user. This includes planning for anticipated demand to avoid a bullwhip effect, and results in the company making a “make vs buy” decision for a product.
At this stage, businesses will identify, evaluate, and establish connections and cooperative relationships with sellers who are able to provide materials and services for the product.
Now, the product is physically made. This requires the scheduling of production and testing, and ensuring production meets all compliance standards necessary. As multiple machines may be used, collaboration is of critical importance here.
This stage focuses on logistics and includes storage, coordinating customer orders, organizing deliveries and payment collection. With a modern focus on “doorstep delivery”, coordinating customer information is more important than ever.
Finally, every business needs to have a solution for returns in place, in case of defective goods or unwanted products. This can include elements from other pillars, and relies specifically on logistics.
The Importance of Supply Chain Management
As companies around the world have realized the importance of collaboration in getting their products to end users, the management of every step of that process – the “links” in the supply chain – has become an important tool in driving growth and building competitive advantage. Building an effective, efficient supply chain can reduce costs, eliminate waste, and eradicate product delays across the board, for all of your products. Being aware of the potential hang-ups and holdups inherent to your production process can prepare you for issues that would otherwise be unexpected and detrimental. Now, with a supply chain management tool that best suits your business, you can see all the data across your supply chain, allowing you to plan for the future and make instant decisions that benefit your business. In a world that is rapidly moving towards the cloud, the tracking of these processes is faster and more accurate than ever before. SCP can help you implement a supply chain management solution that integrates seamlessly with your existing systems, and gives your business the ability to soar to new heights.