Supply chain Management (SCM) also called value chain or demand chain involves managing a network of interconnected businesses. These businesses in-turn is involved in the provision of product and service packages demanded by the end customers in a supply chain.
These supply chains involve manufacturers, suppliers, transporters, warehouses, wholesalers, retailers, other intermediaries and even customers themselves.
Products that are traded on the consumer goods market, in its evolution from raw material to finished products continously undergoes a series of successive transactions on the business to business market. The management of a whole network of an interconnected business is involved in the provision of product and service package. These are demanded by the end customers in a supply chain. Supply chain management is well known for spanning all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption.
Well, in case you’re still not aware of the benefits of Supply Chain, then just keep on reading!
Benefits of Developing Supply Chain:
- Supply Chain helps in improving product and material flow in the network.
- Supply Chain offers seamless information flow.
- Enhanced financial flow can be experienced with Supply Chain.
- Greater competitive advantage can be experienced with Supply Chain.
- Supply Chain offers greater value to consumers.
- Reduction in the lead time gap can also be experienced.
- Faster and smaller deliveries to intermediate customers are offered by Supply Chain.
- It introduces the concept of increased shareholder value.
Also Read: Factors influencing consumer behaviour
The performance of a supply chain can be driven by the below-mentioned points:
- Facilities – It’s the no. of plants, their exact locations and capacities – No. of warehouses/distribution centres (DCs), their locations and capacities – No. of retails outlets and their locations.
- Inventory – These involve inventory control strategies – Storage facilities – How costs are balanced against service.
- Transportation and storage resources – It includes warehousing, distribution and logistics strategies – Modes of transport used.
- Suppliers – How are they sourced? – In-house vs. outsourcing balance
- Human Resources – What’s their role?
Well, the bottom line is that Supply chain management is highly important for getting things done in the right way
