What Is Supply Chain Management?

The Benefits of Using Technology for Supply Chain Management

In the past, supply chain management lacked the agile capabilities necessary to be effective, leaving businesses with lost productivity and revenue. However, today, thanks to innovative technology and the need for things to always be better and more effective, there are options that can help supply chain managers mitigate risks associated with gathering raw materials and delivering the promised services or goods.

What Is Supply Chain Management?

When supply chain management systems are implemented, businesses can also reduce shipping delays, overhead costs and waste in an effective and proven way. The benefits offered by this type of systematic approach will impact all areas of the supply chain, from product quality to turn around times for orders.

Some of the other benefits offered by supply chain management systems can be found here.

Quality Assurance

There are quite a few manufacturers in the U.S. that have relocated to other countries to try and reduce production costs. This has resulted in domestic personnel to find other jobs. The result of this has been lower product quality. The high instances of defects and rework necessary due to poor systems have raised the cost of doing business. However, with supply chain management, techniques can be used, such as quality management systems, which will improve operations. For many companies, this will come just in time, since this continued production of defective products can lead to a business’s demise in many situations.

Risk Mitigation

Business leaders have the challenging role of managing risk within their business. With supply management systems in place, it will allow for the identification of various critical risk factors in organizations or with suppliers. This can be related to compliance with operational safety or laws, product quality or something else, but mitigating risk is a necessary process for supply chain success. The methodologies used by these systems will help with organizing and managing risks and ascertaining the possibility of external or internal failures. If you don’t have proper management systems in place, some companies may be exposed to legal liabilities and risks.

Shipping Options

With e-commerce continuing to grow around the globe, buyers now have more options than ever before to order products. This means the shipping options available need to keep up with the marketplace demands. This requires that companies adjust their supply chains to meet the preferences of their customers. Regardless of if it is a single, small parcel or a larger, bulk order, shipping in an accurate and fast fashion is essential for continued business success. A supply chain management system will help businesses find the best ways to ship products, all while reducing costs as much as possible.

Inventory Buffers

In virtually all types of businesses, there is variability regarding customer spending. This means that businesses must manage their inventory in a way that minimizes holding costs all while offering flexibility to meet demands from customers. If inventory gets too low, businesses may have to begin paying overtime to meet demand, or lose revenue when customers go to the competition. With management systems in place, inventory buffer levels, which have been pre-determined can be used to reduce the occurrence of this.

As you can see, thanks to innovation and technology, managing supply chains is easier than you may have imagined. Utilizing these systems will lead to higher productivity and revenue for the business.