What is Supply Chain Management?
Supply Chain Management Definition: When you want to create and bring valuable products to your customers. Supply chain management will be an essential strategy for all those operations. Supply chain management is basically managing the different processes that go into creating a product and bringing it to consumers. So as a supply chain manager you are going to overlook everything that goes into creating a product.
These include getting and storing the raw materials from suppliers, managing the warehouse processes and inventory control. Overlooking the manufacturing and customer support services is also another important aspect of supply chain management. It allows you to take a bird eye’s view on all the different processes that goes into creating a product. Which you can then store, manage and distribute to your customers.
One of the main benefits of supply chain management is that it helps you to spot inefficiencies in all the different process that goes from creating to delivering the product. Getting the product faster to customers and maintain quality can give you a great advantage these days. If you and your competitor’s product shares the same set of qualities.
What you can do to gain competitive advantage is to release your product quickly into the market. This will allow to gain as much market share as possible. So if your product is distributed quickly out into the market before your competitor’s. Customers will tend to gravitate to yours more because you never tend to run out of supply.
When you practice supply chain management. It helps you to put everything into a framework you can use to manage all the different processes. This increases transparency on the different operations and helps you spot inefficiencies to make the overall processes better.
Below you can see seven tips that you can apply in supply chain management:
1. Segment customers based on services
The traditional way of segmenting customers would be demographic, industry, product etc. All these are still extremely useful today. Another one you can add to the list is segmenting your customers based on the different services. This will help you to create unique services and value to each unique segment.
2. Customize your supply chain management network
When designing your supply chain management network. Focusing on the services and how profitable each customer segment is going to be is really important. This allows you to make changes in your network in order to adapt to the different services.
3. Watch the market
When you are planning out your sales forecasts and operations with your team. You must look at your market to see if there is any change in demand in ordering patterns, new innovation etc. This will give a different perspective on things and how you should approach your strategy.
4. Customer demand
Gone are the days when you can just stockpile inventory to catch dust in your warehouses. Focusing on the customer demand will help you to better manage your inventory. It will help you estimate how much products to create and ensure you don’t over produce too much. You can use a key performance indicator to track customer demand patterns.
5. Manage supply sources
You must work closely with your suppliers and build a great relationship with them. This will allow you to reduce the costs of owning the materials and services. It will also help you to increase the margins for both you and your supplier.
6. Invest in technology
Information technology has gotten more important for supply chain managers over the years. Investing in new technologies that will help drive productivity within your different processes can save you a lot of money. Using softwares to give you an overview of the flow of products, service and information is vital.
7. Be data driven
Big data is really revolutionizing the way business managers, executives and stakeholders do business. As a supply chain manager keeping tabs on the data is very essential. You must ensure that you have key performance indicators in place to track and measure supply chain activities. This information will help you manage the processes easier and spot problems faster by simply analyzing the data.
Supply chain management is a very important process you can use to provide the best quality product to your customers. It helps you to put every process that goes into buying, creating, managing and selling a product. In a model that makes it easier for you to overview certain processes and make important decisions. When you practice this in your organization it will help you to spot inefficiencies in certain processes. You can then use the feedback data to develop strategies. In order to make the flow of the processes runs smoother.