What Is Supply Chain Management?

Supply chain management is a vast area that covers all of the processes and activities involved in the supply chain. It has only been in recent years that the term supply chain management (SCM) has been thrown into the limelight and people are beginning to take its importance seriously. Nowadays an efficient and effective supply chain is something that businesses need to continuously work and strive for.

Why is supply chain management so important?

Supply chain management has two core functions, it enables customers to receive value, and it also encourages an efficient practice that gives a business a sustainable and competitive advantage.

In order to do this, supply chain management needs to review, manage and oversee all of the supply chain activities, both internally and externally. To ensure an effective and efficient system, every single action must be covered from logistics, information and product sourcing.

In a busy market, where competition is rife, it has never been so important to ensure an efficient operation that meets business needs but also focuses on consumer trends and requirements.

Who is supply chain management for?

Wherever you look, the processes of supply chain management are happening around you. A trip to the shop offers a multitude of supply chain activities such as planning, forecasting, information relay and logistics to make sure the item you want is in stock.

Some businesses will focus their attention on singular supply activities in order to improve their system. However, every process is a cog in the supply chain system and to gain maximum value, and efficiency a complete supply chain management system should be implemented to ensure each process is efficient, timely and effective.

For any business, meeting customer requirements is critical and to do this; it is important that everything is done correctly in the supply chain. Supply chain management is vital for any business that wants to complete tasks successfully and make their customers happy.

What are the key supply chain management activities?

There are many processes and events involved in the supply chain system utilising both physical (e.g. logistics) and information (e.g. forecasting) flows. Some of the key areas on focus in the management system include;

  1. Preparation

To create a supply chain that works, a chain must be designed and planned with a view to executing without flaw. This activity involves research and analysis in order the predict trends, demand and risks to the system.

  1. Procurement

Before you can implement a supply chain, you must first need to ensure you have an effective buying strategy that enables you to have access to all you need during the production and delivery of your business.

  1. Creation

To create, manufacture, and produce what you want to sell, you need to understand how the supply chain will affect these tasks. This could be ensuring that materials are in place to reducing the time between processes so every activity can be completed without issue or lost time.

  1. Logistics

Once your product or service is finished, how do you get it to your customers? Even if this isn’t a physical logistics process, it will still need to be analysed to ensure that goods flow easily, safely and at the best price to provide value for you and the customer. This may mean third-party management.

  1. Reverse logistics

A point that is often forgotten is how you ensure an effective delivery of goods being returned to you for processes such as recycling, reselling, repairing and disposing. As customer returns increase, a reverse logistic process needs as much attention as your delivery of goods to your client.

  1. Customer satisfaction

If your supply chain leads to dissatisfied customers, then there is a broken process that needs to be addressed. Customer satisfaction is integral to a successful supply chain and successful business as a whole. Orders need to be fulfilled seamlessly and flawlessly to keep customers returning and to keep your business running smoothly.

Benefits of supply chain management

In a world where supply chains are growing increasingly complex, management is key. Depending on the size of your business this may be a role of one person or for a team of workers that focus on specialist activities within the system. When you manage the supply chain, you’ll see benefits such as;

  • More information for critical business decisions
  • Quicker and smoother flow
  • Improved cash flow and finance management
  • Better ways to meet customer demands
  • More flexibility for your business
  • Achieve business objectives
  • Better relationship with suppliers and clients.
Improve your supply chain management with reverse logistics

An overlooked supply chain activity is reverse logistics, however, by tapping into this area, you can see benefits such as lower costs, improved customer satisfaction, repeat business and recovered costs. Ribble Right Size can help to manage your reverse logistics process by allowing you to create the perfect size box for every product on demand. This allows you to resell goods at full value and keep a healthy bottom line for your business.

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