Recent disruptions in the global supply chains have resulted in part shortages, crowded ports, and delayed deliveries. Supply chain management (SCM) connects the entire manufacturing system, from sourcing and procurement of raw materials, through effective production and distribution mechanisms to product delivery – and even the systems for product recalls.
Companies with the most effective supply chains adopt a holistic approach to SCM. They do not treat components, such as manufacturing, planning, and delivery, as independent business processes. Instead, they think of all the possible ways processes are interlinked.
The idea behind SCM is that the supply chain adds value to organizations, even offering them a competitive edge. This opposes the historical perspective of considering this network a cost center.
Globalization has truly changed the game for organizations. Now, companies can broaden their radar and push the scale across continents. As such, they need smarter and dedicated global supply chain strategies. Beroe’s SCM solutions help the clients accomplish greater synergy among shareholders. It offers extensive procurement and market intelligence, enabling organizations with insights to make efficient and cost-effective decisions. Contact Beroe, talk to an expert today, and take confident strides to ace supply chain management.
Importance of Supply Chain Management
The biggest challenge of the global supply chain management is to satiate the demand cheaper, faster, and with less wastage than peers – all while maintaining quality standards. Simply put, to succeed in today’s marketplace, businesses must efficiently manage many moving components.
In that context, supply chain management help mitigate the following risks:
Sadly, long lead times can expose the shipments to even longer delays. With numerous steps in the global supply chain and long distances for products to travel, there’re enormous chances for things going south.
A crucial advantage of supply chain management is that efficient communication and collaboration reduce distribution loopholes, logistical errors, and delays in manufacturing and shipping. This, in turn, improves customer satisfaction.
Cash Flow Issues
Cash flow management is a severe matter across all businesses, particularly in global logistics and supply chains. Powered by data, effective supply chain management improves decision-making and enables businesses to create profitable partnerships.
Moreover, supply chain management is armed with tools and technologies to enable predictive assessment of possible risks to address disruptions better. As such, this ensures a smooth-running supply chain with streamlined invoicing processes - and happy customers.
Supply chain management helps businesses keep negative publicity and legal liabilities at bay that stem from breaches of global corporate social responsibility (CSR) norms.
When organizations have indicative data of where risk might exist, they can better alleviate it, either through any defensive strategy – upgraded resources, coverage policies, and innovative technologies – or better work methods.
Benefits of Supply Chain Management
A solid supply chain management reduces the possibilities of inherent risks while purchasing raw materials and selling deliverables. Let’s delve into some of the most tangible benefits of supply chain management:
An organization that can accurately project demand will not lash out on inventory. That strengthens the cash flow – less resource is tied up in products on the warehouse shelves, and organizations realize reduced manufacturing, shipping, and inventory carrying costs.
Besides, employing suitable automation solutions can lead to a better inventory management system. Further, by embracing more robust processes, companies can boost efficiency and decrease labor costs.
Greater Control over Quality
When quality issues arise, the outcomes can cost significantly to organizations. For example, following the rule of 10, the product repair or replacement cost surges by 10X at each progressive step.
Organizations may show up with a better quality assurance (QA) approach or notice that a particular courier or vendor has a considerably greater frequency of defective shipments. They can then work with the partner to rectify that.
Of course, customers will appreciate noticeable quality improvements, and service staff cherishes saving the money and time once spent fixing quality-associated problems. Furthermore, a solid SCM curtails product recalls and lawsuits that cause lasting harm to a company’s reputation.
Better Efficiency Rates
When a business’s supply chain processes, including resource procurement, logistics management, and delivery, are strategically planned and implemented, they can anticipate the demand more accurately and fulfill them. This boosts the organization's efficiency to keep up with disruptions, ever-changing markets, and volatile industry trends.
Further, companies that invest in gathering real-time data and automating supply chain operations can prevent unwanted delays in production and shipping. In addition, as they have backup strategies in case of inventory or procurement issues, they can better deal with the challenges – thus improving customer experience.
Keep Pace with Demand
Companies with access to real-time, accurate data from every channel can predict the demands better. By being more agile, they can adjust readily to the demand and adequately respond to the evolving market conditions.
Better Risk Mitigation
Analyzing supply management data at a granular level can expose possible risks, compelling the organizations to implement a “Plan B” to tackle the unwelcomed circumstances.
By taking a proactive approach, instead of being reactionary, organizations can prevent the negative adverse spillovers from quality control problems or other issues as they come up. Besides, businesses that are proactive have remedial measures in situ to escape or cover the losses they may incur from disruptions.
Components of Supply Chain Management
Supply chain strategy involves a couple of components that are pretty crucial to the system. Let’s deep dive into each of them:
Planning begins with narrowing down the details of your operation blueprint. First, decide the manufacturing location of your product – either domestic or international – and whether you will develop the whole product yourself or buy some components from someplace else.
Next, decide how you will produce and stock your product. Will you create products in advance and hoard them to wait for orders? Or, will you make them once the consumer orders? You can utilize either blend of these strategies. Not to forget, the approach to measuring performance is defined before planning starts.
The next stage is procuring raw materials and any components you aim to outsource. This must happen at the best possible price, in the right quantity, at the right time. It is vital that businesses meticulously screen every vendor and negotiate all deals to get the best value sans compromising quality. Delivery scheduling is important, too.
Evaluating vendor performance is a constant need for optimum supply chain analytics, scheduling payments, and ensuring export/import requisites are fulfilled.
This is where bundling, assembling, dressing, or staging happens. Companies need to optimize this process to ensure minimum deviation in outcomes and minimize or stave off non-compliance to customer demands. Further, the manufacturing process is always a space for constant improvement, even in the most cutting-edge automated manufacturing units.
Also called logistics management, this component covers all the steps for processing customer orders, distributing them, and shipping them. It also includes inventory and warehousing or paying a service provider to look after both.
Furthermore, this is also where you consider trial and warranty periods and billing after the delivery of the end product.
You will need a straightforward and seamless process for customers to return a product. For defective products, this phase includes the company’s set rules for tracking performance, inventory, and costs for the returned product. This implies:
- Identifying the product condition
- Approving returns
- Arranging delivery of replacement product
- Offering refunds
How Beroe Helps Organizations with Supply Chain Management
Beroe believes in the power of synergy and brings more than 15 years of experience in procurement intelligence and supplier compliance solutions. Beroe’s SCM solutions help clients reinvent and transform their supply chains for tomorrow.
The company puts together advanced expertise and applied intelligence in a way that positions procurement teams at the top. Beroe’s offerings ensure efficient delivery of goods from suppliers to customers. In addition, it Identifies suppliers on different criteria – industry, category, geography, and certifications – from a database of 4.2 million suppliers.
Leverage Beroe’s extensive domain expertise developed through long-term collaborations and commitment to make your supply chains work faster, better, and with more flexibility. As a procurement intelligence leader, Beroe is trusted by thousands of organizations, including 400 out of Fortune 500 companies. Now arm yourself with insights you need to ace SCM.
2021 Supply Chain Management Updates
At-scale supply chain upheaval has stretched the global supply management processes in ways few thought they would ever witness. As such, many leaders are now making their supply chain management more resilient as they emerge from the ongoing pandemic and reboot strategies to predict disruptions from now on.
Scroll down to know what is happening in the global supply chain management.
(Note: We’ll update this section regularly. So, bookmark this page and visit again!)
GoComet Becomes Top Transport Management Solution Provider for Revolutionizing Global Supply Chains
Singapore-based GoComet has been recognized as the 'Top Transport Management Solution (TMS) Provider in APAC 2021' by Logistics Tech Outlook.
GoComet's end-to-end automation is a big step forward that has helped businesses globally to build supply chain resilience during the COVID-19 pandemic. The company’s AI-driven TMS SaaS is transforming the global logistics realm by leveraging progressive machine learning (ML) and data science to streamline logistics and ensure transparency in business.
At present, more than 100 supply chain & logistics giants scattered across 35 nations bet on GoComet's platform to automate shipment tracking, reconciling invoices, procurement transparency, and benchmarking freight.
Further, GoComet helps shippers globally transfer cargo worth billions of dollars and drive double-digit cost savings. To date, the company has saved around $35 Mn freight spend.
"Technological advances in AI and machine learning have the potential to make waves across multiple sectors touched by the logistics industry, from commodities to pharmaceuticals and more. GoComet already has a proven track record of facilitating significant cost savings in supply chain management for some of the largest global corporations," said Chitransh Sahai, Chief Business Officer, GoComet.
GoComet’s AI solution turns data sets into actionable business intelligence and helps clients to make sound decisions. "From the point, goods are manufactured to the point they are delivered to the consignee, supply chains generate massive amounts of data. GoComet's AI-powered TMS not only automates the end-to-end operations but also converts this huge volume of data into insights," notes Chitransh.
Supply Chain Management Book Recommendations
Logistics & Supply Chain Management
Written by Martin Christopher, Logistics and Supply Chain Management is one of the better textbooks on supply chain management. It factors the tools, fundamental processes, and initiatives that ensure businesses grab and maintain their competitive edge.
The book deals mainly with the best practices in supply chain management in the present age of globalization. Understand all the essential topics comprehensively. While it contains less compelling graphics and looks less like a textbook, it is among the pretty few supply chain manuals that address supply chain risk.
The updated 5th iteration of the book boasts new and updated case studies and illustrations. In addition, it comes with two new chapters – Service Logistics and Routes to Market.
Published initially about three decades ago, Logistics and Supply Chain Management has been purchased more than 100,000 times and is the UK’s bestseller on logistics and supply chain management. It has secured a 4.6/5 rating on Amazon.
Check out the preview of this book here.
Managing Supply Chain Operations
The title of the book sums up what it is all about. Published in 2017, this book is co-authored by Leonardo Decandia, Lei Lei, Rosa Oppenheim, and Yao Zhao.
Read about critical factors of effective supply chain performance – demand forecasting, inventory control, sales and operations planning, capacity assessment, and supply chain integration, to name a few.
What is astounding about this textbook is that it boasts real-life instances, case studies, and strategies from best practices, with a focus on socio-economic impact. Moreover, the book offers concrete evidence to support its arguments.
Every practice and solution that the book contains rests upon research projects performed with more than 100 participating corporations.
If you are pursuing your master’s in supply management or business & administration, this book should definitely be on your bucket list. At present, it has a rating of 4.2/5 on Amazon.
Check out the preview of this book here.
Frequently Asked Questions
What is supply chain management?
Supply chain management handles the flow of goods and services and includes all the processes transforming the raw materials into the end product. It encompasses the proactive streamlining of an organization’s supply-side processes to boost customer value and gain a competitive edge in the market.
What are the benefits of SCM?
SCM offers the following benefits:
- Stay on top of the demand
- Risk assessment and mitigation
- Better efficiency
- Lesser Quality Issues
What are the stages of supply chain management?
Supply chain management consists of the following five stages:
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