The supply chain is a key business process that helps to create and deliver value to your customer. If managed well, it offers enormous opportunities to improve an organization’s profitability. Good supply management helps a business to improve efficiency, customer service and cost effectiveness to compete in demanding markets and stand out from the competition. By streamlining work processes, forming stronger relationships with suppliers, and incorporating technology, you can significantly increase your company’s profitability.
The performance of a company depends on the vendors that supply goods to it, as well as the customers that buy products and services from it. They are linked through their transfer of information, materials and funds. The collaboration amongst these entities to satisfy customer needs and reward all members of the supply chain is what is referred to as supply chain management. Today, it is a leading process-improvement, cost-saving and revenue-enhancing business strategy.
Key elements of effective supply chain management
The following are important steps in reducing the supply chain costs:
The performance of a company depends on the vendors that supply goods to it, as well as the customers that buy products and services from it. They are linked through their transfer of information, materials and funds. The collaboration amongst these entities to satisfy customer needs and reward all members of the supply chain is what is referred to as supply chain management. Today, it is a leading process-improvement, cost-saving and revenue-enhancing business strategy.
Key elements of effective supply chain management
- Delivering quality products, on time and within the budget.
- Planning ahead and executing the business deals as per the plan.
- Conducting the business in a professional and ethical manner and charging a fair price for the products and services.
- Focusing on best practices and continuous improvements.
- Using technology to improve services.
The following are important steps in reducing the supply chain costs:
- Order management: It involves keeping track of the product availability. Shipping accuracy, lead times and invoice accuracy,
- Electronic commerce: This involves using standardized computer codes, barcodes, standard numbering system etc.
- Inventory management: It comprises of keeping a tab on obsolescence of goods, price change, vendor managed inventory and communication of inventory optimization schemes.
- Logistics management: Within its purview come products return rates due to shipping damage, cycle time for delivery, proof of delivery etc.
- Sales productivity: This involves pre-sales support, post-sales support, marketing support, and business support.
