Every modern business is in need of supply chains to help speed up the production and delivery. In fact, a supply chain is the backbone of every business and especially, eCommerce businesses.
So, what is a supply chain management (SCM) system? How does it help businesses to reach their target? A supply chain management (SCM) system is a set of solutions that manages and oversees the flow of goods, data, and finances as a product or service move from point of origin to its final destination.
It’s simply an act of moving products from the point of origin to the point of distribution. One could argue that supply chains have been around since time immemorial.
Supply chain activities encompass everything from product development to logistics. It also includes production and manufacturing, sourcing, transportation, inventory and warehouse management, and shipping.
If you were to spend one day at a large business then you will notice that one of the key components to their success will be the supply chain management.
This will have been optimised so that the entire process runs like a well-oiled machine and it can be highly impressive to see it in action.
A properly managed supply chain increases the efficiency of the business, reduces downtime, cuts costs and ensures that the customers receive their goods on time.
The Value of Optimisation
Many smaller companies and businesses do not place a big emphasis on supply chain management. This could be because the operation is smaller and they feel that they do not need to create an efficient system. However, this is not true because optimising the supply chain can have a huge impact on the success of a company.
In addition to being more productive and speeding up the entire process, it will also help with the brand’s reputation. Why? Because you will demonstrate to your customers that you are a highly efficient and professional business that prioritises the service to their customers.
Not only this, a good supply chain management will help to reduce operating costs too. So, it is highly worthwhile for businesses of all sizes.
How to Optimise
Fortunately, there are lots of ways that a small business can optimise their supply chain. A few examples include hiring the right employees for the job and making sure that they are properly trained. Also, they need to utilise technology and software throughout the process to streamline the supply chain and reduce errors.
It is also important for a small business to outsource certain aspects so that they are using professionals to manage key areas of the supply chain. This could include using reputable couriers like TNT to handle shipments.
When it comes to suppliers, a small business needs to source these suppliers strategically and collaborate to streamline the process and reduce operating costs. These supplier relationships also need to be maintained with open communication going both ways.
A properly managed supply chain will help any sized business to succeed through improving efficiency, reducing operating costs and delivering a high-quality service to the customer.
It is a key point of emphasis for larger businesses because the operation will be bigger than a small company, but that is not to say that a small business cannot benefit from supply chain optimisation. Fortunately, it can be relatively straightforward to optimise a supply chain and particularly for smaller businesses.