Are you facing increased costs throughout your supply chain? Are you experiencing customer churn due to the inability to properly meet consumers’ demands? Has your supply chain become complex due to multiple channels to market?
Optimize your supply chain and raise your customers’ expectations thus making your business sustainable and efficient.
Due to increased consumer demands, the choices on the market have doubled. In times like this, your business can gain a competitive advantage by having your supply chain digitalized and optimized.
Our supply chain solutions optimize the entire supply chain, including inventory management and logistics. Putting the customers in the focus and ensuring demands and supply chain challenges are properly met is our focus.
By effectively managing your supply chain, you save your business costs, maximize sales and improve customer satisfaction by having the right products at the right time and in the needed quantity.
Supply Chain Management Process Flow
The following diagram depicts the directed flow of activities of a Supply Chain Management.
Taking into consideration consumers expectations, multiple channels to market, competitors, and changing times, our Supply chain solution includes optimization of the following supply chain operations:
- Demand management
– Demand planning
– Merchandise planning
– Trade promotion planning
- Sales and Operations Planning
- Supply management
– Supply planning
– Production planning
– Inventory planning
– Capacity planning
– Distribution planning/Logistics
- Product portfolio management
What is Supply Chain Management?
Supply chain management refers to the management of the flow of goods and services and incorporates all the processes needed to transform raw materials into final products. It organizes the company’s supply-side activities to ensure delivering additional customer value. Supply chain management handles the entire flow of creating a product, from the raw components to making and delivering the final product to the client. Each company has created a network of different suppliers that transfer the product along from the raw material suppliers to companies that deal with clients directly.
The main idea of Supply Chain Management revolves around two basic concepts:
- The first one is that every product reaching an end-user is a representation of a collective effort of various companies. These companies are referred to cumulatively as the supply chain.
- The second concept is that even though supply chains exist for a long time now, most companies didn’t pay attention to more than what happened on their premises. Very few companies understood or managed the entire chain of activities that ensure the product is delivered to the final consumer. The result was of course unproductive supply chain.
Companies that constitute the supply chain are connected through information and physical flows.
How does it work?
In the simplest form, the overall supply chain management workflow is divided into three different groups: product, information, and finance. Every company that forms part of the supply chain belongs in one of these groups.
- The product group contains timely creation, storage, and product delivery across the supply chain. It also ensures that the quality of the product is assured at each location.
- The information group involves sending and receiving sales and purchasing orders as well as a delivery status update. This workflow must be handled well because all of the other workflows are dependent on the correctness of the information that is sent across the supply chain.
- The finance flow refers to dealing with payment, billing, inventory management and other finance-related workflows.
According to CIO on the other hand the traditional supply chain management system contains the following five components:
- Planning – managing and planning all resources needed to meet client’s demands for a given product or a service. Once the supply chain is defined the company needs to define metrics to measure its efficiency and effectiveness in delivering customer value and achieving the company’s goals,
- Sourcing – choosing the right suppliers that will provide everything needed to create the product is the first thing to do. After that the company needs to define the processes that will monitor and manage the relationships with suppliers,
- Manufacturing – organizing all activities from accepting raw materials to manufacturing the product, to testing and finally shipping and delivery,
- Delivery and logistics – coordinating customer orders, scheduling deliveries, dispatching loads, invoicing clients and receiving payments,
- Returning – last but not least, creating a process to handle returns and defective or undesired products is a must.
Why is SCM important?
Good supply chain management is a vital part of almost any company and is crucial for its success, as well as for customer satisfaction. There are many reasons why this is so and among the most important ones are:
- SCM boosts customer service – this is mainly because customers expect to receive the right product and the right quantity of what they ordered to be delivered. Customers also expect to receive the delivery at the right address or have the products available at the proper location (for example a customer will not be satisfied if the ordered motorbike is broken and the repair shop doesn’t have the parts necessary to fix it within a day or two). Customers expect to receive their order on time (if they order a birthday present they would like to have it delivered on the day of the birthday). Last but not least when it comes to customer service, customers expect a quick response.
- SCM reduces operating costs – a decrease in purchasing costs (retailers rest on supply chains to deliver expensive products fast and avoid inventory costs), decrease in production costs (manufacturers rely on supply chains to avoid material shortage that would potentially affect production), decrease in the total supply chain cost (an efficient supply chain helps companies remain competitive on the market, as they can meet customer desires at the lowest cost).
- Improve financial status – increasing profit (a good supply chain helps reduce costs significantly), decreasing fixed assets (good organization of the supply chain can help avoid costs for unnecessary warehouses or transport vehicles), cash flow increase (a supply chain that is organized properly speeds up product flows to customers, shortening the time for delivery and decreasing the period of invoicing the customer).
Key features of an effective SCM
Certain features are truly essential to choosing the proper supply chain management software. We will cover the top three that help companies create a strategic supply chain management system they can rely on:
- Integration possibilities across the supply chain – integrating suppliers, shippers, warehouse centers, OEMs and customers should be enabled. A connection with other applications or enterprise software the company is using or any third-party applications to ensure efficient information flow across the supply chain is also a must. Integrating different systems, people, and processes enables a single source of truth and eliminate errors or miscommunication. It also decreases the costs of maintaining multiple applications and improves production planning. This in turn results in improved production planning, using logistics efficiently and avoiding stock-outs. Using APIs, data connectors and SDKs enable integration and leverage of existing infrastructure.
- Real-time collaboration abilities – having information real-time helps avoid a lot of blockages, goods missing, or customers that are not satisfied. Real-time abilities empower companies to respond to problems in the supply chain in no time. Also, an effective SCM software allows various stakeholders to work jointly without the need for a lot of back and forth communication. This also leads to improved collaboration and increased transparency.
- Process optimization capabilities – if repetitive tasks are automated, employees can spend more time doing activities that generate revenue. Automating the order-to-cash lifecycle can significantly shorten the product life cycle and reduce the necessity for paper documents, thus creating tighter bonds among delivery, warehousing, and manufacturing. Besides automating operational tasks using some customized rules, companies can use AI and ML to optimize other repetitive tasks also. This can help companies be more agile, manage complex tasks easier and rely on humans only in rare cases.
Optimize your supply chain and improve visibility throughout your supply chain. Our experts can help you build a supply chain that withstands the test of time. Explore our solutions and let’s connect.