Benefits of Supply Chain

Benefits of Supply Chain.

What is Supply Chain Management?

CSCMP (The Council of Supply Chain Management Professionals) define Supply Chain Management as follows.

Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion and all logistics management activities. It also includes coordination and collaboration with channel partners which can be suppliers, intermediaries, third party service providers and customers. In essence, Supply chain management integrates supply and demand management within and across companies.

Supply chain management is the management of the flow of goods and services that includes the process from transformation of raw materials to finished products. The supply chains cover everything from production to product development and information system needed to direct the undertakings. The supply chain lays out all aspects of the production process, including the activities involved at each stage, information that is being communicated, natural resources that are transformed into useful materials, human resources, and other components that go into the finished product or service.

Key Benefits of Supply Chain Management

Supply Chain Management is a most beneficial business model in organizations as it help to achieve the business objectives. Supply chain focus on the core activities within our organization required to convert raw materials or component parts through to finished products or services. The goal of supply chain management is to look holistically at the entire supply chain from supplier through to the consumer, and review three core areas of people, process and systems in order to maximize value from all activities.

Collaboration among stockholders

Supply chain collaboration means coordinating with internal departments and external partners to sustain an optimized flow through the supply chain in order to efficiently meet demand and ensure on time delivery and meet the customer demand. It means establishing real-time shared visibility and processes with supply chain partners to facilitate identification and resolution of issues. Lack of communication between vendors and distributors and lack of transparency will to delay and customer complaints.

Greater efficiency

Supply chain efficiency is defined as the internal standard of performance of an organization. The goal of an efficient supply chain is to save money and maximize profits by optimizing the processes and stages in the supply chain. Supply Chain efficiency can be increased after optimizing logistics operations. Collaboration among carriers and vendors will avoid delays an improve efficiency. Communicate with suppliers also very important to achieve supply chain efficiency.

Shipping Optimization

Shipping optimization means ensuring that each step in the shipping process (from packing to choosing a carrier) is done in the most cost effective way. Selecting appropriate mode and routing is one of the most element in hipping optimization. Proper documentation and cash flow will help to optimize sipping as it will avoid any demurrage from port and detention from carriers.

Reduced inventory and overhead costs.

Inventory refers to raw materials, goods-in-process, finished goods, or merchandise. It is one of the most valuable assets for a company dealing with tangible goods. Inventory management is the process that ensures the adequate availability of these goods across the supply chain of a company — manufacturing facilities, warehouses, and the last point of sale. The goal of effective supply chain inventory management is to guarantee that the right goods are in the right place at the right time. Effective supply chain management can reduce overhead costs and boost revenue. The day-to-day operational cost of a company is known as the overhead cost. Read on to know how effective supply chain management can help in slashing overhead costs.

Better visibility and data analytics.

Supply chain visibility is the ability to view or track inventory as it moves through the supply chain. Real-time supply chain visibility is the complete, end-to-end view of a company’s logistics, inventory and warehouse management processes and people in real time. Supply chain visibility is needed to make rapid decisions.

Supply chain analytics refers to the processes organizations use to gain insight and extract value from the large amounts of data associated with the procurement, processing and distribution of goods. Supply chain analytics is an essential element of supply chain management (SCM). Different types of supply chain analytics include:

Descriptive analytics

Provides visibility and a single source of truth across the supply chain, for both internal and external systems and data.

Predictive analytics

Helps an organization understand the most likely outcome or future scenario and its business implications. For example, by using predictive analytics, you can project and mitigate disruptions and risks.

Prescriptive analytics

Helps organizations solve problems and collaborate for maximum business value. Helps businesses collaborate with logistic partners to reduce time and effort in mitigating disruptions.

Abdul Gafoor

www.digitalsupplychaintoday.com