Supply Chain Management Can Make or Break your Business

Supply Chain Management Can Make or Break your Business

There are certain elements of business that can make or break a company, and supply chain management is one of those.  A supply chain is a system of companies, people, information, and resources involved in moving a product or service from a supplier to a customer. When the managing of this supply and demand network breaks, the results can impact many other departments and can slow a company’s progress substantially. To manage the supply chain in business is to streamline the company’s supply-side activities in order to maximize profits, improve customer value and benefit competitive advantage within a market. Because so much hinges on productive supply chain management, improper management can be devastating.
The Nuts and Bolts of Supply Chain Management
There are many different aspects of supply chain management, which encompasses the flow of information, materials and finances within an organization. All three of these elements play a role in every step of a product’s movement from the manufacturer to the consumer. Supply chain management can also involve the movement of products to wholesalers and retailers, as well as the return of products from consumers to retailers. Essentially, supply chain management involves the entire life cycle of the product, which exemplifies why it is so integral to the success of a company. Through effective supply chain management, an organization may truly flourish.
 
Tips for Managing the Supply Chain
1.) Mitigate risk in the management of your supply chain.
Respond efficiently and adequately to disruptions that occur. Through analysis and planning, identify potential issues in the supply chain, and then create a structured approach to risk management. Some of these supply chain interruptions will be preventable, while others in your business will only be able to be responded to once they occur. Learn to distinguish between the two and prepare a specific course of action. It is also important to understand what operating risks exist within the industry in order to anticipate potential disasters.
2.) Strengthen links in the supply chain.
Analyze each step in the supply chain to determine where strength and value can be added. A supply chain managed more effectively before disruptions occur may allow for your business to bounce back more quickly and with a less negative impact on the bottom line. Improvements in cost-effectiveness and efficiency of the supply chain before issues occur may greatly mitigate their impact. It will benefit your business to monitor the performance of each step to determine where revenues and productivity may be impacted. Establishing metrics for measurement and tracking are required.
 
3.) Optimize and protect profits.
Even small optimizations can have  a profound impact on the bottom line. Consider improving technologies, cutting costs, adding links and removing links where necessary to optimize the supply chain. The best way to protect profits is to gain as much control as possible over every step in the entire process, from start to finish.
The Bottom Line
Supply chain management is an essential part of any business. Whether you are manufacturing and retailing a product or buying and reselling one, how you manage your supply chain can mean all the difference in your bottom line. Taking steps to protect and improve upon your supply network now can make it simpler to avoid and deal with disruptions that may occur in your business over the long haul.

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