Supply Chain Management
SUPPLY CHAIN MANAGEMENT STRATEGY :
Supply chain strategy is an iterative process that evaluates the cost- benefit trade-offs of operational components. Business strategy involves leveraging the core competencies of the organization to achieve a defined high-level goal or objective. A supply chain is the connected network of individuals, organizations, resources, activities and technologies involved in the manufacture and sale of a product or service.
WHAT IS THE IMPORTANCE OF SUPPLY CHAIN MANAGEMENT?
Supply chain managementinvolves optimizing your operations to maximize both speed and efficiency. Speed is important because customers value fast service.
WHY SUPPLY CHAIN MANAGEMENT STRATEGY IS IMPORTANT FOR AN ORGANIZATION?
Supply chain management (SCM) is the active streamlining of a business' supply-side activities to maximize customer value and gain a competitive advantage in the marketplace. It represents an effort by suppliers to develop and implement supply chains that are as efficient and economical as possible.
It is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies.
At present, Supply Chain Management strategies are the critical backbone to Business Organizations. Effective Market coverage, Availability of Products at locations that hold the key to revenue recognition depends upon the effectiveness of Supply Chain Strategy rolled out. Very simply stated, when a product is introduced in the market and advertised, the entire market in the country and all the sales counters need to have the product where the customer can buy and take delivery. Any glitch in the product not being available at the right time can result in the drop in customer interest and demand which can be disastrous. Transportation network design and management assume importance to support sales and marketing strategy.
In a global scenario, the finished goods inventory is held at many locations and distribution centers, managed by third parties. A lot of inventory would also be in the channel in transportation, besides the inventory with distributors and retail stocking points. Since any loss of inventory anywhere in the supply chain would result in loss of value, effective control of inventory and visibility of inventory gains importance as a key factor of the Supply Chain Management function.