Supply chain management assist in attaining cost efficiency within the organization. It aims at optimizing all process of business which bring down the production cost, packaging cost, warehousing and transportation cost and avoids any wastage of goods by facilitating timely delivery. It minimizes the overall operating expenses and enhances the overall profitability.
Enhance output
The concept of supply chain management aims at maximizing the overall productivity of business. Supply managers monitor all production processes and ensure that all resources are efficiently utilized. Any wastage of resources is avoided which lead to maximize the overall output.
Avoids delay in process
Preventing any delays of business process is one of the major advantage of supply change management. Supply chain manager ensure that all materials are timely acquired for facilitating uninterrupted production of products. Also, they regulate all delivery and logistics services of business which promote delivery at right time at right location thereby avoiding any delays.
Easily identify problem areas
Supply chain management enable business in recognizing its issue that are adversely affecting its reputation and profitability. Managers can easily track the performance of every department and identify which one is lacking in delivering its duties. In absence of this concept, it will be difficult to detect the issue and every department will blame each other for any problem that erupts.
Better collaboration
Process of supply chain management bring better collaboration among distinct parties of business. It focuses on developing a proper communication channel within the business for avoiding any confusion or disputes. Smooth flow of information among all stakeholders like employees, customers, suppliers and distribution enhance understanding which leads to create a better collaboration.
Disadvantages of Supply Chain Management
Expensive to implement
Major limitation of process of supply chain management is that it is quite expensive to implement. It requires large investment in terms of time, money and other resources that become unaffordable for small businesses.
Complicated
Process of supply chain management involves numerous complexities as it involves several departments within the organization. It may lead to create confusion and hamper the normal functioning of business. Employees may feel hesitant and demotivated to accept this concept as it is new to them thereby giving rise to several other difficulties.
Lack of co-ordination among departments
The concept of supply chain management functions properly only if there is better coordination among departments of departments. Establishing a coordination among several departments within big corporate is a quite difficult task where this concept may eventually fail to perform.
Requires trained and personalized staff
Supply chain management requires qualified and trained human resources for its effective executive within the company. Company need to incurs heavy expenses for acquiring such taskforce that is professional and highly skilled. Small companies may find it unfavorable for their implementation.
Lack of reliability
Supply chain management lacks of reliability as it is completely dependent upon the mode of information exchange among several departments. If there is any instance of inaccurate information sharing by any of the department, then it will have adverse effects on performance of whole supply chain.
Mismanaged Implementation – Changing a supply chain management system takes financial investment, time, and human resources. If not implemented properly, there will be wasted labor, service redundancy, and missed deadlines that result in significant costs.
SCM helps design effective best practices to facilitate different types of supply chain information that usually come in different formats and structures. SCM also enables accurate, timely, complete, and relevant information flow to avoid missed opportunities and possible risks.
Companies, especially those in healthcare and hospitality, buy a wide range of items and want to streamline procurement for a leaner, more manageable inventory. The right GPO can support an organization's buying or sourcing team to achieve the three Cs: control, consolidation and cost savings.
One of the main benefits of supply chain management is its ability to decrease costs by improving inventories, adapt according to customer requirements, stabilizing relationships with distributors and vendors.
By knowing the activities involved in the scope of supply chain management, we can also identify the possible challenges and provide solutions to them.
What is the disadvantage of e-supply chain management? While the implementation of e-supply chain management can provide efficiency improvements, it also suffers from several weaknesses ranging from cyber attacks and reliability of access to uncertain return on investment.
As nouns, the difference between disadvantage and advantage is that disadvantage is a weakness or undesirable characteristic; a con while the advantage is any condition, circ*mstance, opportunity, or means, particularly favorable to success, or any desired end.
Rising price of fuel to transport goods by road, sea or air. Increasing commodity prices raising the cost of raw materials. Higher labor costs from suppliers and manufacturers. Complex international logistics leading to higher charges for storage, transfer and management of products.
If you are looking to improve your operations and implement supply chain management strategies, it is important to explore some of the main goals of supply chain management. These strategic goals include ensuring efficiency, improving quality, and optimizing transportation.
Supply chain management (SCM) is the process of handling the flow of goods or services. The activities involved from acquiring raw materials to the final delivery of the product to consumers come under SCM. Supply chain management minimize the waste, cost and time consumed in the production process.
The five most critical elements of SCM are developing a strategy, sourcing raw materials, production, distribution, and returns. A supply chain manager is tasked with controlling and reducing costs and avoiding supply shortages.
Integration, operations, purchasing and distribution are the four elements of the supply chain that work together to establish a path to competition that is both cost-effective and competitive.
The goal of supply chain management is to provide customers with the right bundle of time, place, form, and possession utilities. Meeting this goal efficiently, effectively, and sustainably is a challenge. Managers employ a variety of approaches to maximize capabilities and create network synergies.
So, what are the 7 Rs? The Chartered Institute of Logistics & Transport UK (2019) defines them as: Getting the Right product, in the Right quantity, in the Right condition, at the Right place, at the Right time, to the Right customer, at the Right price.
A supply chain is the network of all the individuals, organizations, resources, activities and technology involved in the creation and sale of a product. A supply chain encompasses everything from the delivery of source materials from the supplier to the manufacturer through to its eventual delivery to the end user.
The Top-level of this model has five different processes which are also known as components of Supply Chain Management – Plan, Source, Make, Deliver and Return.
The main advantages of this strategy include enabling long-term planning, readily available stock, economies of scale, and allows for more planning and control. However, the main weakness of a push strategy is that it takes a long time to react to changes in the marketplace.
Last but not least, miscalculated planning and forecasting is a major cause of supply chain disruption. When enterprises fail to plan for future demand, they make themselves vulnerable to supply chain failure.
Monotony. While product managers do have multiple responsibilities to handle, they tend to work more or less on the same product in the long term, rather than transitioning from assignment to assignment as a project manager does. This makes the job monotonous at times, with the risk of losing interest in the role.
For example, there are many advantages to travelling by private jet, but there is one huge disadvantage (the cost) that stops most people from flying that way, and therefore the disadvantages outweigh the advantages.
Supply chain problems emerged during COVID-10 lockdowns due to shifts in demand, labor shortages and structural factors. Evolving geopolitical factors are now causing new risks and pockets of stress. Affected sectors include metals and mining, chemicals, automotives, semiconductors and technology. A possible solution?
Supply chain efficiency is about how effectively a company gets its products to the right place at the right time and at the lowest possible cost and how well it uses resources to produce and deliver goods. Improving supply chain efficiency is a key part of any business' overall supply chain management practice.
Generally the key aspects of Supply Chain management are Purchasing (sourcing), Planning (scheduling) and Logistics (delivery). Sometimes logistics is separate, and procurement may be included with Purchasing, depending upon how location specific the procurement activities are.
We identify, based on the literature, the '7 Cs of supply chain management': Connect, Create, Customise, Coordinate, Consolidate, Collaborate and Contribute.
Since Supply Chain Management consists of managing the flow of information, products and services across a network of supply chain partners, manufacturing plants, and customers, the most challenging key factor would be an accurate communication.
“Integration is at the heart of the supply chain and is considered as the brains and heart of the supply chain process.” says Rachael. “As with any project, planning is essential to long-term success. Integration is the process of technology which closely coordinates with supply chain functions and elements.
Hobby: Web surfing, Rafting, Dowsing, Stand-up comedy, Ghost hunting, Swimming, Amateur radio
Introduction: My name is Virgilio Hermann JD, I am a fine, gifted, beautiful, encouraging, kind, talented, zealous person who loves writing and wants to share my knowledge and understanding with you.
We notice you're using an ad blocker
Without advertising income, we can't keep making this site awesome for you.
