Supply chain management is the backbone of any company, big or small, that deals in physical goods with substantial production and distribution processes. When you’re starting out your business, supply chain management might seem like an afterthought; you’re more concerned with what goes on inside your company than the goods that come in and out of it. But when you’re ready to scale up, you’ll need a way to manage your goods from their point of origin all the way to where they’re being used—and that’s where supply chain management comes into play.
What Is A Supply Chain?
A supply chain is the network of all suppliers and producers, distributors, warehouses, and end customers involved in producing and delivering a product. Supply chains are found in a variety of industries including automobile manufacturing.
A consumer goods business’s supply chain can be broken down into four main categories: supplier development and management; distribution; operations management; and customer service. These four components work together to ensure that goods are delivered to customers on time while maintaining a high level quality.
Suppliers need to be monitored for quantity, delivery times, and any changes in price or availability. Distribution requires coordination with carriers and transportation services for getting products from point A to point B without any delays or damage. Operations must handle such things as plant floor layout, storage equipment design, assembly line design, production scheduling strategies and inventory levels. Customer service involves managing customer expectations with respect to pricing/costs, lead times and order fulfilment.
An effective supply chain is crucial because it ensures your company has continuous supplies which allows you to stay competitive by meeting your customers’ needs at a low cost while still ensuring profit margins remain healthy enough for long-term success.
Benefits Of Having A Good Supply Chain In Place
A good supply chain will ensure the availability of your products and services to buyers. Having a reliable supply chain in place means you can trust that what is promised is delivered, without worries about product shortages or delivery delays. It also means you can focus on other aspects of your business, such as marketing and customer service, knowing that your supply chain is running smoothly. Good inventory management also saves you money by reducing the amount of time spent managing inventories; it eliminates waste by reducing excess production; and it prevents overbuying or underbuying by estimating demand more accurately.
It also allows you to offer same-day shipping or delivery services, which can greatly improve your customer experience while enhancing your brand image in shoppers’ eyes. Finally, having control of every step of the process from production to distribution gives you peace of mind because you know where your products are at all times.
Problems With A Poorly Planned And Managed Supply Chain
A poorly planned and managed supply chain can lead to a variety of problems. For example, if your supplies are delivered late or in the wrong quantities, it will be difficult for you to keep up with demand and meet customer expectations. This could cause your customers to look elsewhere for products, meaning you’ll lose money. Similarly, if something goes wrong with a shipment – say you ordered 2,000 units but only received 1,500 – then you won’t have enough product on hand to fulfill orders and may have to cancel some orders altogether. This can damage your reputation as well as cause delays in production that hurt your bottom line.
In addition, a poorly planned and managed supply chain can lead to even financial problems. If your supplier ships you faulty products – say they accidentally send you 2,000 units that don’t work properly – then it may be difficult for you to get a refund or replacements. This could force you to halt production as your staff tries to identify and replace all of these faulty units and seek compensation for losses. Worse still, if there’s an issue with your suppliers’ products that leads to serious injuries or health complications for customers, then it may be difficult for you to find a lawyer who will take up your case due to consumer protections laws in many countries. And it’ll be detrimental to your cash flow.
How Can You Effectively Manage An Effective Supply Chain?
There are many factors to consider when it comes to supply chain management, but the most important is having a plan. You should start by writing down all the points that are essential to your business and then create a list of what you need for each point. You can also make use of a system that will help you manage your inventory and keep track of where things are in the process. When it comes to order fulfillment, be sure that you have enough space in your warehouse or storage area to account for the time it will take for customers’ orders to arrive. If you’re not sure how much space you’ll need, speak with a professional who deals with these matters on a daily basis.
Or you can hire a professional supply chain management company. They will work closely with you to establish goals for your organization’s future manufacturing plans as well as strategies that address potential problems like an increase in problems or changes in technology. They also provide recommendations and support for establishing a sustainable supply chain strategy. With their guidance, there’s no doubt about it: You’ll be able to continue running an effective supply chain without wasting money, resources, or time.
Shield Works Can Take Care of It All
Shield Works has over 17 years of experience in managing supply chain, all the way from manufacturing to delivery. We can help you achieve your goals and objectives while saving time and money. For a free consultation on how we can help your business, call today!