Supply chain management is a well-known component of most businesses and is crucial to business success and consumer pleasure.
Supply chain management should be a top concern for all CEOs, regardless of the business size, to increase their chances of success. As “the integration of important business activities from end-users to suppliers that deliver products and services to provide value to customers,” supply chain management in manufacturing might be summed up in this way. These procedures entail controlling the flow of supplies and goods throughout the business while optimizing consumer value and establishing a long-term competitive advantage.
Let’s start by defining a supply chain.
A supply chain is the network of all the people, businesses, resources, tasks, and technological advancements involved in producing and distributing a good. An entire supply chain is included, from the distribution of raw materials from the supplier to the producer to the final delivery to the customer. The part of the supply chain that moves the finished product from the manufacturer to the consumer is the distribution channel.
Following is a list of a supply chain’s basic steps in chronological order:
- raw material sourcing.
- reducing those materials to their component elements.
- putting the components together to make a product.
- Fulfilling orders and sales.
- product shipping.
- Services for returns and customer assistance.
Lead time is the time taken for any of these processes to complete from beginning to end. Supply chain managers supervise lead times and coordinate the procedures at each stage of the supply chain to maximize customer satisfaction.
Improved Customer Services
Customers look forward to acquiring the right quantity and variety of products.
Customers anticipate that goods will be accessible in the proper location.
Right Delivery Time – Customers anticipate receiving their orders on time
Right After Sale Support – Customers anticipate prompt service for their purchases.
Reduce Operating Expenses
Reduces Purchase Cost – Retailers rely on supply chains to deliver pricey goods promptly so they don’t have to keep expensive inventories in their stores longer than required. For instance, electronics retailers need 60″ flat-panel plasma HDTVs delivered quickly to reduce expensive inventory expenses.
Reduces Production Cost – To avoid material shortages that would cause production to stop, manufacturers rely on supply networks to consistently deliver supplies to assembly facilities. For instance, a sudden delay in the delivery of parts that results in the shutdown of an auto assembly factory might cost $20,000 per minute and millions of dollars per day in missed earnings.
Reduces the overall cost of the supply chain – Manufacturers and retailers rely on supply chain managers to create networks that satisfy customer service objectives for the least amount of money overall. A company can become more competitive in the market by having efficient supply networks. For instance, Dell’s ground-breaking approach to the computer supply chain entailed building each computer based on a particular client order, then shipping the machine to the customer. Dell could save millions of dollars by avoiding having big computer inventories languishing in warehouses and retail establishments. Additionally, because of the quick pace of technical change in the computer industry, Dell avoided keeping inventories of computers that would become outdated.
Strengthen Financial Position
Gains in Profit Leverage – Companies reward supply chain managers because they assist in regulating and lowering supply chain expenses. Profits for the company may rise dramatically as a result of this. For instance, given that Americans consume 2.7 billion packages of cereal each year, cutting the cost of the U.S. cereal supply chain by just one penny would save the whole industry $13 million over five years as 13 billion boxes of cereal passed through the new supply chain.
Reduces the Need for Large Fixed Assets – Companies respect supply chain managers because they reduce the need for large fixed assets like factories, warehouses, and vehicles in the supply chain. The company won’t need to construct four very pricey buildings if supply chain experts can reconfigure the network to effectively service American clients from six warehouses rather than 10.
Cash Flow Is Increased – Companies reward supply chain managers because they hasten the flow of products to customers. For instance, a company can invoice a customer 60 days earlier if it can produce and deliver a product to them in 10 days instead of 70.
How to choose the right Supply Chain Solutions Provider
The supply chain serves as its circulatory system if the warehouse is the center of a company’s activities. Making the proper decision when choosing a supply chain management partner entails much more than just short-term financial gain; it also means less worry for the months and years to come and, without exaggeration, direct investment in your company’s success. The following five factors should always be kept in mind while selecting service providers through the bidding and interview processes:
Location and Service Area
It’s logical to suppose that any corporation can ultimately hybridize territory, regardless of whether it currently just conducts business domestically or internationally. Do not invest time or effort into a service provider that cannot or will not grow with you, just as no one enjoys the process of moving into a home they will outgrow in a matter of months.
Services Offered in a Variety
Piecemealing your supply chain solutions will often result in a painful time sink that worsens with each fiscal quarter due to the speed of modern business. Your supply chain will become more complicated with every touchpoint because there will be another account, invoice, and moving connection. Less downtime waiting for emails to be addressed and people to collaborate when your supplier can handle numerous crucial bases simultaneously.
The opportunity of Discussing Custom Solutions
Even though they sell comparable items or employ comparable pricing and distribution methods, every business is different. Make sure all your vendors are on board since custom supply chain solutions quickly evolve into one of the most crucial points of differentiation in a crowded industry. Your service provider should be capable of adapting their offerings to your needs, from complex cargo circumstances to on-demand reverse logistics solutions.
Ease of Reporting and/or Integration
This is a key selling factor for any possible supply chain collaboration in the era of must-have openness. Any attempts at improvement will involve at least some degree of guesswork without near-instant access to every metric generated between your company and a provider. In other words, a wise, expanding organization doesn’t increase supply chain uncertainty unless it has no other choice.
It’s time to start looking for a business with your best interests in mind if your existing supply Chain Solutions Provider isn’t meeting these criteria. Start immediately by contacting Flash Global to begin leveraging the potential of your supply chain.