Supply chain involves different entities to transform raw material into final product and delivered to the end customer. Supply chain is a system of organization, people, activities from information and resources involved in moving a product or services from supplier to customer.
In simple words a supply chain is a network between a company and its supplier to produce and distribute a particular product to the ultimate buyer. Peoples, entities, information, resources and different activities are included in this kind of network. Here supply chain management, also known as SCM, is a crucial process because an optimized supply chain results in lower costs and a faster production cycle. Supply chain management involves the conversion of natural resources, raw materials and other components into a final product that is delivered to the ultimate consumers. Supply chain management includes the planning and management of all activities involved in sourcing and procurement of raw material, conversion and all logistics management activities.
The supply chain involves a number of steps to get a final product and services to the end customers. The steps include moving and transforming raw materials into final product, transporting that product and distributing them to the consumers. The entities that are involved in the supply chain are producers, warehouses, vendors, transportation companies, distribution centres and retailers etc. Elements of the supply chain require a lot of skills and expertise and when the supply chain works effectively it can lower a company’s overall costs and boost profitability.
How does supply chain management process work:
There are certain key elements that rule the supply chain management:
Product moment:
For the success of any business, it is very important that the product should be moved properly. The timely moment of product from one place to another, appropriate quality check and quick delivery are the key components for customer satisfaction.
Timely order to delivery:
Success of any organization totally depends on the delivery of products to the customer’s hand. Right from the ordering process till product delivery to the customer, the supply chain model should be finally tuned and appropriate.
After delivery services:
After-delivery services are a key aspect for the long-term success of an Organisation. The supply chain should have a system to frequently conduct performance checks and quality checks after delivery, so that the services after delivery are well taken care of.
Benefits of supply chain to an Organisation:
Implementing effective supply chain using powerful supply chain management solution will allow business to optimize the three key flows in the supply chain that is product flow, information flow, and financial flow. When an organization has effective supply chain management, it allows it to decrease the risk of buying raw material and selling products or services to the end users. There are many benefits of supply chain which are as follows:
Improve the product and material flow:
The supply chain in an Organisation improves the product and material flow of that organization. Less time is taken for goods to reach to the ultimate customers. The supply chain allows full visibility into the movements and logistics of goods from the supply to the customer.
Boost up Cooperation level:
The success behind every business is that there is only one thing that they all have in common is proper communication. If there is a lack of communication among vendors, distributors and retailers, they have no idea about what is going on. So, the supply chain boosts up Cooperation level among the different elements of the supply chain and create a proper communication among them.
No more delay in work process:
One of the main benefits of implementing supply chain in an organization is one can lower down the delays in the work process. Since everyone is aware about what they are doing as well as what others are doing. So, it will improve work efficiency and lower the possibility in delay of work process.
Enhance your business profit level:
When you implement a proper supply chain to your business, it will improve collaboration within different areas and ultimately this will increase the profit level of your business.
