Why is Supply Chain Management so important for any business?

Supply chain management of logistics is an incredibly important and a very challenging aspect for businesses today. The demands of businesses are ever increasing and there is constant need for effective procurement, transportation, production, and distribution. All these activities have surged dramatically in the last couple of decades. All the big companies have started giving special attention to supply chain management. This not only helps meet the demands of the consumers but also reduces cost. By incorporating the right strategies they are able to gain an edge over the competition. Here is a quick look at what all the supply chain management entails.

The definition

In the simplest word, supply chain management is all about delivering the right products at the place where they are supposed to be. The products need to be delivered at the right time and at the right place. Also, they must be delivered in the right quantity. Here is an example to explain what will happen if the supply chain management is not effective or is lacking:

Let’s assume that you are walking along a retail shop and see the product tags sticking to the shelf but there is no product. This will mean that the shop lacks inventory and it is all because of the poorly managed supply chain. To be more precise, supply chain management is all about taking care of the logistics processes – inbound and outbound – to bring together the procurers, manufacturers, suppliers, distributors, warehouse managers and transporter so that the demands of the consumers can be met. This means that the transport companies in Sydney also have an important role to play.

transportation

What is the importance of supply chain management?

Whether you are in the manufacturing business or in a healthcare logistics company, you require an effective supply chain management. The competition is rising like never before and the customers now have myriads of choices. If you are not able to deliver the products at the right time (and in the right quantity) the customers will chose the company which could.

Every aspect of the supply chain management has to work competitively. No matter how effective your production is, if the distributor is lazy or the warehouse is not available, the delivery to the customer will get affected. This in turn will incur you heavy losses.

Sustainability is important

One of the biggest concerns for any company is to create an effective supply chain management which is also sustainable. There are a number of factors that weigh in, including government regulations, socio-economic conditions, geographical and climatic conditions, and the capabilities of the personnel involved.

There is a need to integrate the various facets of supply chain management in order to build a cohesive unit where each department performs its own function but is still the part of the whole. For instance, if you are in the healthcare sector you will want the suppliers, medical equipment transport services, and distributors to work in collaboration with each other.

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