What is Supply Chain Management and its importance?
From procuring parts to shipping out finalized products, supply chain management is at the heart of many businesses. With better supply chain operations and management technology, a business can optimize its inventory, gain critical insights, and provide better client care.
Here’s what you need to know about the importance of operations and supply chain management.
The Importance of Logistics & Supply Chain Management
When properly implemented, supply chain management improves the consistency and cost of the organization’s product delivery. Supply chain management is able to decrease an organization’s overhead by optimizing and streamlining ordering and shipping processes. But that’s not all.
Through supply chain management, an organization can:
- Improve upon customer service by providing products quickly, with low lead time.
- Provide faster responses to customer requests, such as providing tracking information for their products.
- Predict potential inventory need and seasonal activity, to reduce inventory shortages.
- Reduce the costs associated with shipping through better inventory management.
- Negotiate better procurement costs through better cost analysis and tracking.
Of course, in order to provide this level of supply chain management, an organization also needs the right technology. Advanced supply chain solutions can support larger amounts of data and process this data in real-time.
Improving Supply Chain Risk Management through Technology
Advanced technology can be used to improve upon an organization’s supply chain management. Newer systems are able to digitize documents, crunch large amounts of data, and make incredibly detailed projections.
A few features include:
- Real-time data availability and product tracking. With GPS tracking solutions, an organization can track its critical assets in real-time, providing better customer service, reducing product loss, and analyzing the effectiveness of routes.
- Risk reduction and improved forecasting. Through advanced data analysis and artificial intelligence, a supply chain platform can anticipate risks and forecast demand, thereby reducing the costs for a business.
- Offer local and global supply chain management. New, advanced systems are scalable enough to support global supply chain management and can be accessed from anywhere to provide better responsiveness in global deployments.
- Better support through digitization tools. Digitization tools, such as scanners and sensors, can be used to quickly pull information into the system without the need for administrative labor.
Altogether, technology can be leveraged to provide more accurate supply chain management, which in turn can reduce risk and improve upon an organization’s bottom line. Businesses need to be conscientious about their procurement and delivery if they want to increase their revenue.
- Supply Chain, as a business function, is undergoing some fundamental changes. Penetration of innovative business model, such as contract manufacturing and partnerships for logistics & distribution, is increasing. Stricter regulatory and compliance requirements have given rise to a need for better process controls.
- Increasing competition and evolving technologies are behind the demand for more sophisticated product lifecycle management. consequently, organizations are now turning to third-party service provides who can deliver end to end SCM solutions that go beyond the traditional boundaries of procurement, logistics, and inventory management.
- SCM BPO is the strategic outsourcing of one or more supply chain processes to an external service provider. The scope of SCM BPO includes supply chain planning (SCP) and analytics, direct material sourcing and procurement, manufacturing management, and logistics management.