“Supply chain is like nature, it is all around us”! In fact, each and every stage of the supply chain delivers food from the farm to your dinner table. Great companies understand the significance of an efficient supply chain and hire supply chain managers to streamline the process in order to achieve productive results.
The best supply chain management programs help you put together an efficient system that delivers competitive advantage and decreases inherent risks.
Here are the top benefits of Supply chain management:
Greater Efficiency
Supply chain incorporates product innovation strategies, integrated logistics, production tactics and forecasting demand. This will put you in a great position to predict demand and also make moves accordingly.
Also Read: What are the Different Stages Associated with Supply Chain Management?
Decreased Costs
One of the main benefits of supply chain management is its ability to decrease costs by improving inventories, adapt according to customer requirements, stabilizing relationships with distributors and vendors.
Collaboration
Another underlying benefit of the supply chain is that it adds up to wonderful coordination of all the business entities in delivering the final product to your end customers. When there is a lack of communication between your vendors or distributors, you have no idea what is really going on. However, when you open the doors and embrace supply chain systems, you can gain access to greater communication with forecasts, reporting, quotation and statuses in real time.
Increased Output
When your business is able to collaborate better, streamline the whole production and distribution process, this directly translates to the company’s bottom line and improves the overall output. As a result, your business can enjoy greater profits and stay ahead of the competition.
No more Delays
You can meet customer expectations and deliver the product to the customer in a timely fashion. Since everyone knows what to do at a given time, this will remove the bottlenecks on production lines, logistical errors in distribution channels and late shipments from suppliers. Altogether there will be no delay in getting the product to the consumers without any damage.
Also Read : What are the Tasks Performed by Supply Chain Managers?
Response to Conflicts
Unfortunately, businesses today have to face a lot of challenges in the market. There are a number of aspects that can lead to production or logistical problems. A supplier might go out of business or a distributor can give you problems. In either case, supply chain management systems can help you cope with these problems at either side of the spectrum.
Every coin has two sides. Where there are benefits on one,there are obvious risks that can arise at any point in time, and in any part of the supply chain.
Even the slightest tremor in the supply chain can rock the entire company’s operations. It is not surprising that companies prefer to employ only experienced candidates or freshers who have completed supply chain certification courses.
Large retail corporations such as Walmart, Amazon, Flipkart, Alibaba and the likes depend on their super-efficient supply chain management to deliver the products to customers at the right time.
Also Read: Best Jobs in Supply Chain Management
Let’s take a look at various risks that supply chain management is exposed to:
Logistical Delay
Right from procuring raw material to manufacturing the product to warehousing to product delivery, supply chain management goes through various processes. Even a minute delay in one step/phase can disrupt the entire value chain. For instance, if the suppliers send raw materials even a day late, it can have a severe impact on the manufacturing schedule and time of delivery committed to the customer.
Also Read : 7 Must-Have Skills to Become a Thriving Supply Chain Manager
Financial Contingencies
Money is the lifeline of any operation and does not exclude supply chain management. If for some reason, the company fails to infuse money into supply chain operations, then everything will come to a halt.
Natural/Man-made Disasters
You can imagine what would happen if there is an earthquake, fire, flood or labour strike! In some cases, the inventory of raw materials, unfinished and finished products will be destroyed. In another case such as labour strike, the production and other operations can stop abruptly for weeks to months. This can severely impact the health of the organizations.
Economic Conditions
During demonetization, most businesses in India had a tough time surviving without cash. There are some processes like payment to daily wage/temporary labourers where the lack of cash can invoke an entire chain of disruption and delays across the organization. Similarly, situations like war, terrorism or severance of bilateral ties with other countries can affect the economy of the country and in turn, the supply chain management of the companies. Even international economic conditions such as stock market crashes can have a direct impact.
Security/Cyber Breaches
In 2014, the leading US retailer Target Corporation received a major setback when hackers stole credit and debit card details of its customers. As the transactions move to electronic and technology platforms, it also increases the risk of security breaches. If the physical and cybersecurity aspects of the supply chain are not taken care of, it can hamper the operations.
Also Read : How can Supply Chain Management Streamline Organisational Processes?
A few other risks include changes in the key personnel, top management or team conflicts across various functions of the supply chain.
As you can see, the benefits of supply chain management yield greater productivity for the company. Help your organization to streamline its process and growth by taking up supply chain management online courses.
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