Supply Chain Management includes planning, procuring, storing, and shipping goods or materials to meet end user demand. Companies that adopt effective supply chain management have a competitive edge in today’s market. Companies that thrive in today’s business environment use strategic supply chain management to reduce cost, increase efficiency and drive profitability. Read on for more information about what is supply chain management and why it is important.
What is Supply Chain Management?
Supply chain management is the system of activities that takes the raw materials and parts, and transforms them into finished goods that are ready for sale to customers. The supply chain management process is sometimes called “logistics management,” and it involves much more than just transporting goods from one location to another. It also involves procuring the raw materials and parts, preparing those items for transport, and storing them until they are ready to be sent to the next step in the process, where they’re transformed into a finished product that’s ready for sale to customers.
Why is Supply Chain Management Important?
Today, customers expect a seamless experience when they shop online or in-store. They expect the products they buy to arrive quickly and be delivered with ease. For retailers, meeting these customer expectations is a tall order. After all, a single product might come from a number of different suppliers, be repackaged and distributed by an entirely different company, and then delivered by a third party. With so many different moving parts involved in getting a product from the manufacturer to the consumer, companies need to implement effective supply chain management practices. In order to meet customer expectations, retailers need to make sure that the supply chain is effectively planned, managed, and monitored.
Benefits of Effective Supply Chain Management:
Reduction in costs:
One of the biggest benefits of supply chain management is the reduction in costs. If your supply chain is inefficient, your business will incur extra costs in both materials and labor. By optimizing your supply chain, you can reduce costs significantly.
Increased productivity:
An effective supply chain management system can increase productivity among employees. This is because employees will not be spending so much time dealing with supply chain issues, such as delayed shipments or a shortage of inventory.
Faster delivery times:
Customers will appreciate when you can deliver their products quickly. This is especially true when customers are shopping online, where speedy delivery times can be the difference between a customer making a purchase or moving on to a competitor.
Reduced risk of outages:
An effective supply chain management system will help you avoid supply chain outages. This can be crucial to your business, especially if you rely on a certain type of product or item being available at all times. When the importance of supply chain management in well understood and a supply chain is managed well, you can avoid situations where a product runs out.
Importance of Effective Supply Chain Management:
In a time when customers have more purchasing options than ever before, supply chain management can be the difference between success and failure. Customers are likely to forgive one late shipment, but they won’t keep doing business with a company that can’t keep up with demand. If you plan for all potential issues and have a contingency plan in place for when something goes wrong, you can avoid being late with deliveries. In addition, if you can anticipate demand and ensure that you have enough inventory to meet customer needs without having excess inventory on hand, you can avoid stockouts. In today’s business environment, companies that use supply chain management effectively are poised to succeed.
Importance of Supply Chain Management Education:
The supply chain management industry is growing, and the career opportunities associated with this field are expected to increase in the future. This makes supply chain management a great career path for students who are interested in working in a growing field and earning a high salary. While there are no degree programs specifically focused on supply chain management, there are a number of supply chain management phd degree pathways that can prepare students for a career in this field. Students can choose to pursue a degree in business administration, supply chain management and operations management, information systems and technology, or another business-related field. Ready to start your career in supply chain management? Above is the online degree programs that can help you get started.
