What is Supply Chain Management, and Why is it important to get it right?
Tuesday, April 13, 2021
Discover why getting supply chain management right is crucial for the survival of any business.
Supply Chain Management involves the management of the flow of goods and services and connects the whole manufacturing process, that is, the process that transforms raw materials into finished products. Supply Chain Management represents an effort by suppliers to develop and implement supply chains that are as efficient and economical as possible.
How are Supply Chains used? Well, by managing the supply chain, companies are able to cut excess costs and deliver products to the consumer faster. How is this done? By tightly controlling internal inventories, internal production, distribution, sales, and the inventories of company vendors.
Supply Chains are nothing new, but, although they have existed for a long time now, most companies have only recently started paying attention to them and to regard them as a value-add to their operations.
Now you have a general idea of what Supply Chain Management is. But...
Why is it so important for businesses?
Well, Supply Chain Management is meant to keep companies away from the headlines and expensive recalls and lawsuits. Why is this so? Because no one is going to care where the culprit for a certain fail is, they are going to blame whoever is closest, and Supply Chains are there in every step of the process.
In addition to keeping companies out of trouble, improvements in productivity and efficiency go straight to the bottom line of a company and have a real and lasting impact. How is this related to Supply Chain Management? Because, basically, they are meant to make the process as effective and efficient as possible!
What do Supply Chain Managers do?
The Supply Chain Manager is responsible for managing and organizing all the activities from the acquisition, production, and distribution of the goods or services a company makes available to their customers.
The chain begins with the acquisition of raw materials and finishes with the delivery of the finished product to the customer, with a lot of processes and responsibilities to take care of in the middle. As such, the supply chain manager needs communication, negotiation and management skills to be able to manage the chain the way everyone expects it.
These professionals are a key factor for the success of any company, as they are meant to ensure that every stage in the supply chain goes smoothly. For this reason, they are extremely valuable assets for any organization, which explains why they receive so high a compensation.