Supply chain management is a highly-organized system that is most commonly used in an industry or organization to deliver a certain product to the consumers or customers, from producing raw materials, manufacturing and transporting the finished product to the consumers. A reliable and fully-functional supply chain management system duties are to maximize the operational functionalities of a certain business, especially in the logistics industry to be quicker, effective, and efficient at the same time.
Supply Chain Management: Definition
Supply chain management or most commonly known to businesses as SCM is not your typical process management that focuses on the generation of cost-efficiency in a business’ budget or workflow to produce much larger operational advantages within a certain organization.
Generally speaking, it is a fact that this procedure is one of the main parts of the whole business process. However, the current and modern supply chain management surpasses the process when it comes to strategic procedures of a certain end-to-end business workflow in order to develop a market and economic value, and at the same time, giving unyielding competitive benefits to other business markets’ rivals.
In the present day, the rise of the digital era has been a lot of help to the overall transformation of the e-commerce industry. Because of the constant change in the technology, businesses use this opportunity to create and develop modern systems and tools that will truly help to the overall functionality of a certain organization or industry depends on the needs of the business. That’s why in order to upgrade the traditional supply chain management, developers and companies created this idea to produce a supply chain software that will help every business to succeed.
Before the digital era, 20 years ago, these kind of workflows and techniques are not practical in an organization. Because it requires a tiring and strenuous effort in order to succeed, plus these processes are time-consuming and at the same time, unorganized.
Why Supply Chain Management is Important?
Supply chain management becomes as one of the most important weapons of a business and at the same time, it brings success in any companies and provides an excellent rate of customer’s satisfaction.
Below are the most common reasons why supply chain management is a necessity in every business:
Supply Chain Management Enhance Customer Service
If a certain business or organization uses supply chain management in the flow of their operational procedures, you can expect that customers can receive their finished product in the expected time of delivery without mishaps.
In addition, because of the functionalities and capabilities of supply chain software, customers will be fully satisfied with the service your business is going to provide. Using this software gives an adequate solution to ease the process of transporting your product from one place to another location.
Supply Chain Management Reduce Operational Cost
When a certain business practice the use of supply chain management in their business process, the company or organization will enjoy the following benefits:
- A decrease in the purchasing cost
- A decrease in the production cost
- A decrease in the total supply chain cost
- Large return of investment (ROI)
- Decrease a business’ fixed assets
- Improves the business’ cash flow