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WHY ANY COMPANY SHOULD GO THE SUPPLY CHAIN MANAGEMENT WAY

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WHY ANY COMPANY SHOULD GO THE SUPPLY CHAIN MANAGEMENT WAY.

Supply chain aims at satisfying the customer through providing quality products even if this is achieved through many organizations that work independently yet they are somehow interlinked. They can cover product production, sourcing and logistics. The main aim is to reduce the need for an inventory

  • It has two core processes;
  1. All products that reach a customer are as a result of combination of processes of several organizations that are known as the supply chain.
  2. Most supply chains in the past have not cared about what goes on in the other organizations of the same chain resulting in disjointed effort and ineffective supply chains.
  • The concerned organizations in the supply chain are linked even without them acknowledging it. This is done by two ways;
  1. Physical flows

They are the most visible and involve transformation, movement and storage of goods.

  1. Information flows

Aim at linking up the organizations by combining their long term goals to achieve uniformity and drive the process towards the same goals.  This is done by updating delivery status and transmitting orders.

  1. Finance flows

Identifies ways to pay up, addresses credit issues and title ownership agreements.

Advantages of Supply Chain Management

  • Quality of product is assured.
  • It reduces the need for an inventory
  • Enables the player companies to do what they are best at and therefore achieve best results.
  • It helps in reducing risks that if one company handled the entire procedure then problems would arise.
  • It helps companies to go about shipping by integrating customer preferences.

Disadvantages of Supply Chain Management

  • It may be complex because of the multiple organizations involved.
  • It is costly and may result in high priced items.
  • Errors in one company may cost the others along the chain.
  • It needs very experienced management to oversee operations.

References

Debenedetti, J. (2017). The Advantages of Supply Chain Management Systems. Smallbusiness.chron.com. Retrieved 1 November 2017, from http://smallbusiness.chron.com/advantages-supply-chain-management-systems-77606.html

SCRC, S. (2017). What is Supply Chain Management? – SCM | Supply Chain Resource Cooperative (SCRC) | North Carolina State University. Scm.ncsu.edu. Retrieved 1 November 2017, from https://scm.ncsu.edu/scm-articles/article/what-is-supply-chain-management