INTRODUCTION- Managing the flow of goods and services forms the crucks of all the business activities. A smooth flow in the integrated processes enables the smooth functioning of the business and thereby helps organizations to gain a competitive edge in the business world. Supply chain is everything from production to the final sale.
WHAT IS SUPPLY CHAIN SERVICES AND SOLUTION? – As per the definition by Ellram and Cooper (1993) SMC is “an integrating philosophy to manage the total flow of a distribution channel from supplier to ultimate customer.”
In other words, Supply chain services and solution is amalgamation and collection of the transactions, activities and functions along with the people connected in a value chain through which products/services flow “from” and “to” the supplier, manufacturer, and distributor till the end customer. Implementation of supply chain services and solution provides an upper hand to the business in the industry and helps in decreasing inherent risk in the process of buying raw materials and selling products and services.
Benefits of Supply chain services are in large numbers. In this article we shall discuss the top 4 benefits.
- Higher Efficiency- In order to stay one step ahead in the business, entities ought to predict the demand for product/supply and act in accordance. This can be done when supply chain is incorporated, logistics are collaborated and unique product innovation strategies are invented. This is the biggest advantage of supply chain management. Because, when an organization works in coordination with supply chain management, they are in better position to adjust and act promptly to the fluctuations of the demand and supply, emergencies in the market and so on.
- High profit margins- With higher efficiency, improved flexibility and the ability to eliminate waste from the production cycle, business entities are at a better position to generate more profit from the business activities. By bringing together the benefits of innovative and collective supply chain, businesses can manufacture and deliver the products/services at a much faster rat and more successfully. According to a report by McKinsey, huge IT projects run over budget and over time by 45% and 7% respectively.
- Product and material flow improvement- Timely achievement of the production goals is an indicator of product/material flow efficiency. The earlier the product reaches the consumer, more efficient is the product flow in the organization. Other factors like the quality of the material, delivery of product, shipment cost and demand-supply balance should also be taken into consideration. It is only through supply chain management that companies can efficiently predict the demand and supply and then look into the inventory management to avoid over/under production. With the help of SMC business entities can keep full trace of the product while it moves from supplier till the end consumer.
- Enhanced Cooperation level- Effective communication is the key to a business’s success. In fact, when there is no communication between the people involved in the direct business like the distributor, seller things are bound to go haywire in the organization. Miscommunication can result in losses for the organization. Hence, enhanced cooperation is one of the biggest advantages of supply chain services and solutions. An added advantage here is the benefit of technology. When technology is embraced, it provides with more ease in communication. In order to communicate it is no necessity that 2 people should come face-to-face. Speedy communication enables the organization to keep all the important people in the loop and gives faster access to reports, information, quotations and other things in real time.
- Decreased Costs- Effective supply chain management results in decreased costs in many areas in the business-
- It helps to make better use of space
- Automated processes
- Well packed products are less likely to get damaged
- Monitoring customer demand from time to time helps in taking order decisions
- Make sure that the in-house operations work well and assess if things need to be changed for optimized performance
Apart from the above stated 4 benefits, supply chain services and solutions also offers advantages like no delay in processes, increased output, boost customer services and many more. As technological advancements are taking place each day, supply chain management is becoming complex. However, with a full proof supply chain service in place, it is definitely going to work wonders for any organization. With the merger of people, activities, processes and transactions, it is easier to face and adapt to the growing complexities of supply chain with ease.