What Is Supply Chain Management And Why Is It Important?
In order to have a successful growing business, you need to have a healthy supply chain. It is a major component in staying competitive with others in your industry. After all, anyone can have a supply chain to keep things up and running, but those with proper supply chain management are the ones that will reach the greatest heights.
What is Supply Chain Management?
A supply chain involves a network of transportation companies, suppliers, producers, warehouses, distribution centers, and retailers that bring together raw materials which are sent into production and then distributed to the final buyer. As you can tell, a supply chain includes many different parts, places, and people – especially when a large list of raw materials and component parts are necessary to create that finished product.
But a supply chain doesn’t just stop there. It involves even more, including different types of technology and activities to make it all happen, such as sales, sourcing, procurement, production, logistics, and more.
How do you know if your supply chain is moving most efficiently and productively?
Supply chain management – often referred to as SCM – is the monitoring, coordination, and management of all of this. It starts from the time an idea for the goods is created to the time it is transformed into a finished product and everything in between. Taking it a step further, SCM is responsible for monitoring the sale of the goods and tracking the trends in certain areas to help with future decisions regarding inventory, production, distribution, sales, and buying cycles.
To help get your supply chain management system in place, you will need to create your supply chain, carefully control each variable involved, monitor their performance, and keep the lines of communication open among everyone involved. Transparency is vital.
Why Supply Chain Management is Important
With well-organized supply chain management, businesses can have a competitive advantage in the market. They can streamline and coordinate all the processes in an effort to ultimately reduce the company’s operating expenses and increase profits. Customers are happy and the overall position of the company in the global marketplace is stronger – what more could you ask for?
Here’s a breakdown of why supply chain management is so important:
- Lower operating costs. Raw materials are delivered and processed in the most efficient manner which reduces overall costs.
- Greater customer satisfaction. With proper management, customers can readily access the product.
- Better financial positioning. You can get rid of unused fixed assets and reduce the cost of supply chain expenses while speeding up the flow of production. As a result, the business ends up with an increase in cash flow.
The sooner you get your management in place, the sooner you will begin to see these changes.
DXL Enterprises Can Help Manage Your Supply Chain
At DXL Enterprises, we provide businesses access to the global market with a crucial piece of their supply chain – procurement. We get you what you need when you need it, and where you need it. Because of our connections throughout the world we have a greater reach for raw materials than most businesses have on their own. The result? You have access to the most competitive prices for the raw materials you need. Consider us to be a smart move for your supply chain management.
Want to learn more? Ready to get started? Contact us today at (201) 891-8718.