Before products reach your customers, they travel a long way. Before they are actually received by the final customer, they are made, quality-checked, temporarily stored, and transported (often multiple times). Every stage in a supply chain has a purpose. As a result, effective supply chain management is essential for expanding your business and streamlining both incoming and outgoing logistics procedures.
In the end, damaged margins, lost revenue, sluggish supply chain velocity, and a decline in customer satisfaction might result from simply one broken connection. In this blog, we’ll go over what is supply chain management, how it functions, what the global supply chain looks like, and best practices for supply chain management.
What is Supply Chain Management?
Supply chain management is the process of managing the flow of products and services from raw materials to finished items, with the goal of maximizing efficiency and delivery to the end user.
Managing the flow of raw materials and components, turning them into completed goods, and delivering them to customers are all included in this extensive process. By establishing a harmonious network of suppliers and organizations, efficient supply chain management increases a company’s competitive advantage in the market, optimizes customer value, simplifies operations, and cuts waste. Without supply chain management, a supply chain could simply not function properly.
What is a Supply Chain?
A supply chain is a group of people and businesses who work together to produce and distribute goods to customers. The producers of raw materials are at the beginning of this network, and it ends when the final product is given to the customer.
Because supply chain management streamlines the production cycle, it lowers costs and boosts efficiency. For businesses to remain competitive, they work hard to improve their supply networks. As one of Chicago’s top supply chain companies, Unilogic Group is distinguished by its remarkable efficacy and affordability.
Can A Supply Chain Exist Without supply chain management?
It is possible for a supply chain to function without specialized supply chain management, but it would probably be disorganized and inefficient. There wouldn’t be an method for organizing the different components and parties involved without supply chain management. Issues including overstocking, stockouts, delayed shipments, and higher expenses could result from this lack of cooperation.
On the other hand, efficient supply chain management offers the monitoring and optimization required to maintain the chain’s smooth operation.
For example, imagine an e-commerce business that manufactures and sells gourmet chocolates. This business’s supply chain involves sourcing raw materials like cocoa, sugar, and packaging, producing the chocolates, fulfilling orders, and shipping them to customers via carrier partners.
For the gourmet chocolate business, supply chain management might include:
- Deciding how many of each chocolate variety to produce
- Ordering raw materials from suppliers
- Coordinating the transportation of raw materials and finished products
- Monitoring and auditing inventory levels
- Partnering with a 3PL for order fulfillment
Effective supply chain management ensures that supply chains run smoothly, are cost-effective, and meet customer demands.
What Are The 5 Phases of Supply Chain Management?
So we’ve gone over what is supply chain management, now let’s talk about the duties of supply chain management. They extend beyond standard purchasing and logistics to include identifying methods to reduce expenses and boost productivity, prevent shortages, and be ready for unforeseen events. The supply chain management process normally consists of the following five stages:
Organizing
Ensuring that a company’s product or service meets customer demand requires efficient planning and resource management. In order to ensure alignment with the company’s strategic goals, this entails building a thorough supply chain and creating metrics to assess its efficacy, efficiency, and value delivery to customers.
Sourcing
Choosing and overseeing suppliers is essential to securing the products and services required for manufacturing. In this phase, procedures for managing and keeping an eye on supplier relationships are established. These procedures cover important tasks including ordering, receiving, managing inventories, and approving payments to suppliers. Supply chain integrity depends on suppliers fulfilling delivery and quality requirements.
Manufacturing
Ensuring that a company’s product or service meets customer demand requires efficient planning and resource management. In order to ensure alignment with the company’s strategic goals, this entails building a thorough supply chain and creating metrics to assess its efficacy, efficiency, and value delivery to customers.
Delivery and Logistics
Choosing and overseeing suppliers is essential to securing the products and services required for manufacturing. In this phase, procedures for managing and keeping an eye on supplier relationships are established. These procedures cover important tasks including ordering, receiving, managing inventories, and approving payments to suppliers. Supply chain integrity depends on suppliers fulfilling delivery and quality requirements.
Returning
One of the most important aspects of supply chain management is creating a solid procedure for managing returns. In order to handle the return of damaged, extra, or undesired goods, a network must be established. A well-functioning returns procedure improves customer happiness by immediately resolving their issues and offering insightful input to improve supply chain operations and product quality.
What is Supply Chain Management – A Summary
So what is supply chain management? Supply chain management entails managing the flow of materials, finished products, and the associated processes to ensure they reach customers efficiently. It encompasses every aspect of the supply chain, from production to final delivery.
By collaborating with third-party logistics providers (3PLs) like Unilogic Group in Chicago, e-commerce businesses can simplify their supply chain management even if they would rather not handle warehouse operations in-house.
Many firms find in-house fulfillment less appealing due to the time-consuming and expensive nature of handling warehousing internally. This involves major personnel costs, training, certifications, resources, safety precautions, and other expenses. On the other hand, 3PLs are proficient in supply chain management, adept at streamlining processes, and up to date on the newest developments in supply chain technology.
Through its vast network of fulfillment centers, Unilogic Group processes orders for a variety of e-commerce firms, freeing up critical time for businesses to concentrate on marketing, product development, and other essential tasks.
