Some of the best names in the business world attribute their success to a robust supply chain management in their organizations. Be it Unilever, H&M, Starbucks, PepsiCo, Nestle, BMW, Nokia or Walmart, their supply chain management has been a key to drive value, quality and innovation.

A Deloitte report too emphasizes on the direct link between supply chain and revenues. It states that 79% of companies with high-performing supply chains achieve above average industry revenue growth. On the contrary, only 8% of businesses with weak supply chains report above-average growth. Hence, the supply chain is crucial to the strategy of any business, regardless of its size or nature.

Let’s delve further into why supply chain management matters.

 

Lowers Operating Costs

The supply chain function in any organization has numerous operating expenses related to logistics, procurement and production. Higher the operational cost, lower the efficiency. Not to forget that cost savings flow directly to the bottom line. A tight-knitted and well-designed supply chain network ensures that all these costs stay within the budgeted plan. By reducing operating costs, the supply chain can push profits upwards without increasing sales.

 

Seamless Flow of Information

With so many functions working together, communication and exchange of information can become overwhelming as well as confusing. Supply chain integrates all functions and aligns them on the same page. It eliminates all bottlenecks in communication within and among the organizations, third-party vendors/distributors and customers.

 

Avoids Delay in Processes

Right from the procurement of raw materials to the production of goods to the delivery of finished products to customers, business is an amalgamation of processes. Any loophole or delay in once process can have a snowball effect on the subsequent processes. Such delays could reduce efficiency and productivity, and even increase the operating cost. Supply chain ensures that everyone knows what they and others are doing. It keeps the product line running smoothly.

 

Improves Customer Service

The customer is the king and no organization can afford their wrath. A dissatisfied customer is likely to talk more about his experiences with a company than a satisfied customer. Let’s say; you ordered a product from Amazon. The expected delivery promised to you is 4-5 days, but you receive the package after a week. Or, maybe Amazon accepted your order only to inform later the product is out of stock. Wouldn’t Amazon fall short of your expectations? However, if the supply chain management is in the right place, inventory can be managed optimally and products can be delivered to customers faster.

Supply chain is all these and a lot more. If you want to get a grip, it is recommended to join supply chain management programs. There are also several online supply chain certificate programs which can be helpful to build a career in this field.

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