The Importance of Supply Chain Management

21 Feb 2018

The Importance of Supply Chain Management

Satria Adirha

2001557602

Sumber Gambar: https://aqurus.ca/what-supply-chain-management-2/

 

Supply chain management involves optimizing your operations to maximize both speed and efficiency. Speed is important because customers value fast service. Increasing speed, however, can cause costs to skyrocket, so maximizing efficiency is equally important. The most effective supply chains deliver products as fast and as cheaply as possible without sacrificing quality. Top companies accomplish this by using complicated logistics tools, such as computer algorithms that choose optimal routes for product shipping and large company databases that allow distant employees to pool order information and coordinate their efforts in real time.

Boost Customer Service

  • Customers expect the correct product assortment and quantity to be delivered.
  • Customers expect products to be available at the right location.
  • Right Delivery Time – Customers expect products to be delivered on time
  • Right After Sale Support – Customers expect products to be serviced quickly.

 

 

Reduce Operating Costs

  • Decreases Purchasing Cost – Retailers depend on supply chains to quickly deliver expensive products to avoid holding costly inventories in stores any longer than necessary.
  • Decreases Production Cost – Manufacturers depend on supply chains to reliably deliver materials to assembly plants to avoid material shortages that would shutdown production.
  • Decreases Total Supply Chain Cost – Manufacturers and retailers depend on supply chain managers to design networks that meet customer service goals at the least total cost. Efficient supply chains enable a firm to be more competitive in the market place.

Improve Financial Position

  • Increases Profit Leverage– Firms value supply chain managers because they help control and reduce supply chain costs. This can result in dramatic increases in firm profits.
  • Decreases Fixed Assets– Firms value supply chain managers because they decrease the use of large fixed assets such as plants, warehouses and transportation vehicles in the supply chain. If supply chain experts can redesign the network to properly serve customers from six warehouses rather than ten, the firm will avoid building four very expensive buildings.
  • Increases Cash Flow– Firms value supply chain managers because they speed up product flows to customers. If a firm can make and deliver a product to a customer in 10 days rather than 70 days, it can invoice the customer 60 days sooner.

Improve Quality of Life

  • Foundation for Economic Growth– Societies with a highly developed supply chain infrastructure (modern interstate highway system, vast railroad network, numerous modern ports and airports) are able to exchange many goods between businesses and consumers quickly and at low cost. As a result, the economy grows. In fact, the one thing that most poor nations have in common is no or a very poorly developed supply chain infrastructure.
  • Improves Standard of Living– Societies with a highly developed supply chain infrastructure (modern interstate highway system, vast railroad network, numerous modern ports and airports) are able to exchange many goods between businesses and consumers quickly and at low cost. As a result, consumers can afford to buy more products with their income thereby raising the standard of living in the society.
  • Job Creation– Supply chain professionals design and operate all of the supply chains in a society and manage transportation, warehousing, inventory management, packaging and logistics information. As a result, there are many jobs in the supply chain field.
  • Opportunity to Decrease Pollution– Supply chain activities require packaging and product transportation. As a by-product of these activities, some unwanted environmental pollutants such as cardboard waste and carbon dioxide fuel emissions are generated.
  • Opportunity to Decrease Energy Use– Supply chain activities involve both human and product transportation. As a by-product of these activities, scarce energy is depleted.

 

Protect Cultural Freedom and Development

  • Defending Human Freedom– Citizens of a country depend on military logistics to defend their way of life from those who seek to end it. Military logisticians strategically locate aircraft, ships, tanks, missiles and other weapons in positions that provide maximum security to soldiers and other citizens. Also, superior logistics performance yields military victory.

 

  • Protects Delivery of Necessities– Citizens of a country depend on supply chain managers to design and operate food, medicine and water supply chains that protect products from tampering. Sophisticated packaging techniques, state of the art surveillance cameras, global positioning systems and RFID inventory tracking are some of the methods used to deter terrorists from accessing these vital logistics systems.

 

Resources: http://cscmp.org/CSCMP/Develop/Starting_Your_SCM_Career/Importance_of_SCM/CSCMP/Develop/Starting_Your_Career/Importance_of_Supply_Chain_Management.aspx?hkey=cf46c59c-d454-4bd5-8b06-4bf7a285fc65