Is Your Company Realizing the Benefits of Supply Chain Management Yet?
The benefits of supply chain management are a revolving door. As a company implements an effective solution, the process evolves and changes are made. This continuous growing cycle offers companies the ability to refine the benefits of supply chain management. With an increased visibility of supply chain a company is obviously more responsive.
There are three main components to an effective supply chain management: product flow, information flow and financial flow. A company should have a well implemented process of these three. Within those are planning applications and execution applications. Combining every aspect of the SCM will inevitably increase a companyâ€™s survival in its market.
How the Benefits of Supply Chain Management Streamline a Companyâ€™s Inventory Processes
A company can potentially have inventory at every stage of the supply chain. The most basic stages would be raw materials, semi-finished and finished products. Inventories can, however, lie at processes in between. An inventory creates a buffer within the supply chain and can account for 20 to 40 percent of a productâ€™s value. Keeping a close eye on inventory can keep a company at the top of its game.
How the Benefits of Supply Chain Management Reduce Costs
Companies are able to reduce their total costs with the benefits of supply chain management by eliminating the unnecessary overhead costs. SCM is intended to do this without an impact to a productâ€™s quality by simply doing away with any non valued processes in the grand scheme of day-to-day operations. The benefits of supply chain management are obviously utilizing the competitive advantage of creating customer value and customer satisfaction by improving efficiency, which lowers costs.
Spotting Bottlenecks is one of the Benefits of Supply Chain Management
Benefits of supply chain management can easily spot bottlenecks that can occur but that doesnâ€™t mean they canâ€™t happen. The elimination of bottlenecks is a main goal for a companyâ€™s supply chain management solution but they will always exist to some degree. Having a solid supply chain management solution in place in front of the bottleneck operation will help to stop it from occurring in the first place.
Improving Communications between a Company and Their Suppliers is one of the Big Benefits of Supply Chain Management
Sharing information with a companyâ€™s suppliers and also with the companyâ€™s customers, a SCM application could potentially enhance the time-to-market of its products. ThisÂ would also help to reduce costs and increase management of resources to everyone involved for future projects. In an effort to improve communications among supply chain trading partners, a collaborative plan, forecast and SCM tool must be put in place.
Companies may want to consider the benefits of a supply chain management solution as a secret weapon against their competitors. A strong system can easily enable a company to align themselves with others within their industry and coordinate efforts for a more profitable end result.