Startup Hacks
Is Supply Chain Management Necessary For Company’s Profitability?
Are your business costs more than your profits? Are you losing money on procurement prices, delays and supplier’s relationships?
Well, for this, one should first know what is supply chain management? It is the management of the flow of goods and services which involve the movement and storage of raw materials from point of origin to point of consumption. The supply chain is a crucial part of a business.
To understand this, let us think in a reverse manner of the product delivery.
For instance, let us suppose you buy a product from the market. How did you think your favorite items such as clothing, perfumes, mobiles or anything reaches you? I can bet that you have not because that isn’t a buyer’s concern. It is just the manufacture’s concern to think about all these stuff.
Let us take an example of car manufacturers, the car makers try to reduce the cost of making at every stage so that they can save money and time. This primarily focuses on the production of a single good and hence known as single lean supply model.
On the contrary, there is agile supply chain which concentrates on flexibility rather than the cost of the product. Here the product is manufactured once the customer demand is known.
At every step, proper planning and relationship management are tied up with the suppliers. This results in the smooth running of the processes which yield good supply chain. By this, the customers get a quality product on time.
Poor supply chain hinders the progress by delaying or stopping the organization to deliver products or supplies.
That is why supply chain has strategic importance in the business.
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