Supply chain management is the process of securing products and services from their raw manufacturing state and supplying the final product to the consumer. For any supply chain management system to work properly, a business needs to have a good network of reliable suppliers and close relationships with other businesses, that act as one of the ‘chains’ in the process.
The 21st century has seen a massive increase in product innovation and new technologies, so supply chain management is critical to keep a business going. Here is why having an integrated system is worth every penny and resource spent.
Decision-Making Becomes Strategic
In the past, many people would make purchases based on a brand, and you would see popular companies advertised on t-shirts and key rings. Since early 2019 economists have found that consumers are choosing quantity over quality, becoming less loyal to any one specific brand. The supply chain process has slowly been improving based on these new dynamics of how people have changed their spending habits.
Regionally produced items have also started to take off as more businesses are finding that locally sourced products and services are cheaper. By using an integrated supply chain system, is it clear that more and more people want to buy from within their town or country and no longer look for international products and services.
Improved Customer Satisfaction
Almost all products and services can benefit from a supply chain management system to improve their levels of customer satisfaction. Consumers want their purchases to be delivered quickly and efficiently, and the technological age we are in makes that possible. By integrating with other suppliers or streamlining the supply chain process, businesses can offer customers discounts and specials by reducing running costs.
Smart technology can be used to offer customers tracking services with 24/7 support and communication channels, so that the logistical side of the business is taken care of. Limiting an integrated supply chain management to regional suppliers and manufacturers is a great way to cut out the red tape associated with international customs and airfreight costs. Delivery times can also become much quicker, so that customer satisfaction is maintained as best as possible.
The number of monopolies in the global market is decreasing, and many businesses are choosing to expand their portfolio by entering into partnerships with other businesses and suppliers. A printing company, for example, may choose to provide training services for textbook production, instead of focusing just on publishing the raw material.
By collaborating with other like-minded business strategies, companies can save on overhead costs and share profits through service level agreements (SLAs). A busy office building can partner with a recycling company to lower its refuse costs and implement recycled materials to be used as office supplies. By using integrated systems there is a greater benefit to reducing delivery times and opportunities to improve products or services by saving in-house costs.
The role of supply chain management needs to continuously change and adapt to the times. The 21st century is the fastest growing era humans have experienced in terms of advanced technology, and businesses have to ensure that they are always finding new ways to streamline supply chain management systems and logistics.