"It's not the organizations that are competing. It's the supply chains that are competing." ~ Wael Safwat
In business, providing goods or services to your customers is the center of your work and providing goods without a systematic process is impossible. The systematic process that we are referring to is supply chain management.
If you are involved in any kind of business or even willing to start one, you must be well acquainted with the term supply chain management. It will not only kickstart your business but will also accelerate the growth of your already existing business.
If you are curious already, then this article will help you learn all about supply chain management.
By the end of this article, you will have insights into:
- What is Supply Chain Management?
- Why is Supply Chain Management Important?
- What are the big three benefits of supply chain management?
- How does supply chain management work?
- Tips to improve supply chain management
So, let’s delve right into it.
What is Supply Chain Management?
"Supply chains are in every organization. Even a corner store has a supply chain. They just might know it." ~ Nadia kassam
Supply chain management administers the progression of labor and products and incorporates all cycles that change raw materials into end products. It includes the dynamic streamlining of the process out of a business' supply process. Exercises to amplify customer value and gain an edge over the others in the market.
Supply chain management addresses all the effort put in by the suppliers to create and execute supply chains that are pretty much as proficient and efficient as could be expected. Supply chains cover everything from, manufacturing the products to improving them to the data frameworks expected to coordinate these endeavors.
Sounds like a vital process, right? Let us understand in-depth what supply chain management means to your business.
Why is Supply Chain Management Important?
The world can undoubtedly be seen as one enormous supply chain network. Customers and manufacturers are speaking with one another on all business-related discussions. Any item goes through different stages before arriving at its destination.
Production network the board manages significant issues relating to the development of enterprises, associations, worldwide brand extension, and reevaluating.
Supply chain management is a need for the establishment of any company. A powerful supply chain management addresses the issues of the two manufacturers and buyers and adopts a coordinated strategy. On the off chance that activities in different areas are coordinating and imparting, this might make supply chains considerably more effective.
It makes the logistics of any company also a lot simpler to track and deal with all aspects of a supply chain network in giving inventory and procurement information supported by more than one branch.
It can improve your business in several ways that we are going to look into shortly. Powerful supply chain management allows you to improve customer service significantly. The right item and the right amount should be delivered conveniently to pacify the manufacturers and wholesalers.
Consumers need to have the option to know the exact area they should go to acquire the goods that they need. Generally speaking, superior supply management will eventually prompt better business.
Let us see what the big three benefits of supply chain management that you will win with this practice are.
Big Three Benefits of Supply Chain Management
By coordinating suppliers and applying innovation, associations can bring down working expenses by reacting all the more progressively to client needs. Managing goods, manufacturing goods as per demand.
Supply chain management ensures that associations are not over-manufacturing, which diminishes manpower and adds to inventory costs, and disrupts the inventory management process.
Manufacturers also depend on supply chain management to reliably deliver raw materials to assembly plants to avoid a shortage of material that would shut down production.
Furthermore, they also depend on it to design networks that meet customer service goals at the least total cost. Efficient supply chains enable a firm to be more competitive in the marketplace.
Today, since organizations are using innovation and technology to draw closer to customers' demands and interests rapidly, most of the time, goods stay accessible for customers to buy.
When manufacturing goods is streamlined to create barely enough, work and materials can be given to manufacturing new items to offer the customer and establish the brand further. Apart from production, this might also mean contributing different administrations to customers.
Efficient Use of Assets
With the help of effective supply chain management, organizations can utilize house resources, transportation, hardware most adequately. Maybe by unnecessarily adding mileage to assembling gear, organizations can deliver to the need and not waste it.
It ensures that the organization delivers goods at an increased speed, guarantees that goods are accessible, no quality issues, and explores gets back effortlessly, at last further developing worth, both inside the organization and for the customers.
The organizations value supply chain managers because they decrease the use of large fixed assets such as plants, warehouses, and vehicles in the supply chain.
These are some of the compelling benefits of supply chain management. While you are just preparing to have better supply chain management in your company, let us quickly understand how supply chain management works.
How Does Supply Chain Management Work?
There are five main stages involved in the supply chain management process that make the supply chain process efficient.
Stage 1: Planning
You plan and manage all the required assets, resources needed to satisfy customer demands. It is necessary to forecast demand before you even start doing your business. Once you have set up your supply chain, you can track the metrics of your movement, measure it to quantify whether the supply chain is working for you or not. Find out whether or not it meets the customer expectations and company goals.
Stage 2: Sourcing
The second stage is a crucial one. This stage involves selecting suppliers who will give you the goods, raw materials, or services to help achieve your target in addition to the fact that this includes making several agreements that oversee the suppliers, yet additionally overseeing and observing existing connections.
As a sourcing component, the supply chain team supervises the cycles of ordering goods, receiving inventory, overseeing inventory, approving the invoices for the suppliers, and making sure the process is a breeze.
Stage 3: Manufacturing
The supply chain management process additionally involves assisting in the manufacturing of the final product. This mainly includes exploring and managing the raw materials, quality testing of the goods, bundling them. For the most part, organizations assess the quality, output, and worker usefulness to guarantee by and large guidelines are maintained.
Stage 4: Delivering
As you may have already guessed, your supply chain management will always be a failure without this stage. Once you have manufactured the goods, it has to be delivered to the right hands.
This stage incorporates managing the orders, scheduling the delivery of the goods, dispatching the goods, invoicing the goods, and getting payments done on time. By and large, in the delivery process, an armada of vehicles should be aligned so that transportation, shifting of the goods is done smoothly.
It all comes under supply chain management, from big trucks to mini trucks to even two-wheelers involved in making small deliveries. There are also times when organizations outsource delivery or transportation process.
Stage 5: Returning of Goods
This may be a rare case scenario for most companies, but it is important that there is a staged, planned process for returning the goods. After all, it also speaks of the customer service that you provide.
This might sometimes involve either rejecting or re-delivering an imperfect product; in others, it might just mean returning an item to the distribution center. In this stage, the organization should be capable and adaptable to help support needs.
The establishment for each of these segments is a strong organization of supporting cycles that can adequately screen the data across the supply chain and guarantee adherence to laws and guidelines. This includes many departments that take care of the successful return of goods- HR department, IT department, quality confirmation team, finance department, sales department.
Yes, this is exactly how supply chain management work. If you already have a process at work, you might want to improve it for better results. So here we have a few tips to improve and enhance your supply chain management into a powerful one.
Tips to Improve Supply Chain Management
You don’t want the growth of your business to be stagnant. It should be ever-increasing. With a powerful supply chain management system, you will always be a step closer to boosting the growth of your business. To help you strengthen your supply chain management, we have a list of tips.
Automatize the Process with ERP
Observing inventory levels requires a lot of time and effort from your end. However, you can cut down on the time and effort you dedicate with the help of ERP systems. This implies that the ERP programming can be customized to put orders with vendors when you hit the inventory reorder point.
Considering one of the main components of supply chain management is maintaining an optimum inventory level, an ERP system can come in very handy. Programmed buying will free up representatives to focus on other significant obligations.
Have a Standardized System
A standardized system is a key to the accomplishment of any supply chain management. By having a standardized ERP system, you will expand proficiency while setting aside time and cash. Another advantage is that workers will share a standardized set of tools and devices, which will build accuracy, empower collaboration and rule out any kind of miscommunication.
There is always a chance of things going wrong. There can be wastage of goods, squander mistakes, and even fraud is prevalent in supply chain management. To curb this, you must have a transparent system.
Perhaps the most serious problem is accommodating the product numbers with an actual stock tally. Some products are disregarded or basically disappear. Expanding your supply chain management will decrease the chances of these misfortunes that could happen with your company.
Have Data Ready
The supply management process relies upon accurate information and data. Having continuous reports accessible in real-time will give significant understanding into the success of the supply chain.
ERP programming permits both customers and managers to have the option to quickly get inventory, buying, and information for primary dynamic purposes.
With Deskera system, you can have real-time reports and strengthen your supply chain management.
Evaluate Vendor Performance
An easily running supply chain framework requires good vendor performance. Consequently, it should be observed and evaluated through effective measurements accessible through ERP frameworks.
With a couple of snaps of a mouse, the board can audit merchant process durations and blunder rates. This information is significant during merchant re-dealings.
There are numerous wild factors and factors with store network the executives. Therefore, various directors along with the supply chain regularly are uninformed of one another's costs.
Having unified monetary information pinpoints precisely when and where the association goes through cash. This will empower cost-related correspondence and systems for uniting costs and smoothing out measures.
Solid Return Management
As we have already established that returns are a crucial component of supply chain management, you must have a solid return management system. Each strong supply chain management technique needs proficient returns to the executive’s framework. Makers should have the option to viably deal with returns so they can rapidly have re-interaction or re-fabricate returned items or units.
Many make naturally center around consistently moving new items out the entryway, and in this manner, returns frequently neglect to stand out enough to be noticed they merit. Having the option to oversee returns more readily will squander and distinguish reliable item issue factors.
Just In Time Inventory
You are not prepared for the customers’ demand, but you wish to cater to their needs regardless. In that case, your best option is JIT inventory.
ERP systems naturally work well with just-in-time manufacturing and JIT Inventory Management to decrease inventory costs and increase inventory turnover ratio. As a result, there will be fewer overhead costs and order fulfillment communication mistakes. Operate at the optimal inventory levels and reduce warehouse costs.
Develop a Supply Chain Council
You must set up an administering department that offers a reasonable procedure for usefulness and productivity. The supply chain council is to lead and adjust the supply chain management organization's goals.
It will help you eliminate hindrances in the organization. It additionally works on the business' cross-utilitarian correspondence. It sets out open doors for pioneers to give viable store networks to the executives in future tasks.
Review your Supply Chain Management Procedures
The supply chain management must review survey strategies and methodology to guarantee productivity and consistency of the process. It likewise dodges bottlenecks in the production network, streamlines the tasks, and relieves the dangers of burglary and extortion.
Normal surveys help in distinguishing distinctive danger components and assessing their monetary effect. In this way, you can make your process more concrete.
Strengthen Your Supply Chain Management with Deskera
Like every business, we are sure you aim for the skies too, and with Deskera, we can help you achieve your target. The Deskera software will improve your supply chain management in ways you have never seen before. Let us understand what these ways are.
To start with, with Deskera books, you can make your supply chain management a breeze. Manage your sales and orders from start to finish. Create estimates and convert to invoice upon confirmation. Receive and record online payments automatically. Fulfill orders and keep track of your cost of goods sold.
Take charge of your inventory, now manage all your inventory through a single dashboard. Whether you're picking, packing, and shipping, or even dropshipping, we've got you covered.
Delivery of goods is an important component of supply chain management, and with Deskera, you can make it a cakewalk. Consistently delivering products on time builds a strong rapport and trust with your customers.
Deskera’s inventory management software enables you to stay on top of your stock levels at all times and fulfill your customer orders with confidence. Meeting the customers' demands quickly and efficiently will keep them happy and coming back for more.
Manage and know your inventory levels with Deskera within a few taps Struggling to know the current stock levels in your warehouse? Fret not! Deskera’s inventory management software updates your stocks in real-time and allows you to view the stock availability in each warehouse in seconds. Accessing your inventory levels has never been easier. Deskera empowers you to make informed decisions to optimize your inventory and reduce costs significantly.
This is the magic of Deskera that you will be missing out on if you don’t take the free trial today.
- Supply chain management administers the progression of labor and products and incorporates all cycles that change raw materials into end products.
- It makes the logistics of any company also a lot simpler to track and deal with all aspects of a supply chain network in giving inventory and procurement information supported by more than one branch.
- Supply chain management is a need for the establishment of any company.
- Supply chain management ensures that associations are not over-manufacturing, which diminishes manpower, adds inventory costs, and disrupts inventory management.
- When manufacturing goods is streamlined to create barely enough, work and materials can be given to manufacturing new items to offer the customer and establish the brand further.
- With the help of effective supply chain management, organizations can utilize house resources, transportation, hardware most adequately.
- In supply chain management, you plan and manage all the required assets, resources needed to satisfy customer demands.
- You select suppliers who will give you the goods, raw materials, or services to help achieve your target.
- The supply chain management process additionally involves assisting in the manufacturing of the final product.
- This stage incorporates managing the orders, scheduling the delivery of the goods, dispatching the goods, invoicing the goods, and getting payments done on time.
- Efficiently return goods to the customer. Organization should be capable and adaptable to help support needs.
Tips to improve supply chain management
- Use of ERP systems to better optimize and automize the process.
- Use of the standardized system.
- Have more transparency of your system than have grey areas to avoid issues.
- Always have data to plan your supply chain management process.
- You must evaluate vendor performance so that it helps in the best decision-making.
- You must be aware of the costs so that you are paying the right amount.
- Have a solid return management process in your supply chain management to add more stars to your customer service.
- Use of Just in time inventory to make sure you never lose your business and customers.
- Develop a supply chain council so that you remain under the guidelines.
- Frequently review your supply chain management procedures so that you can keep developing your procedures to best suit your business.
- Use Deskera to have the best supply chain management in the market.