Supply chain management is the process of managing how goods and services flow within an organization and the final consumer. It comprises the raw materials’ movement and storage, transformation of these raw materials and components into finished goods then delivering them from the point of origin to point of consumption. With the help of supply chain management in an organization, quite a lot of benefits are accrued from its operation in that it enhances effective supply chain within the business thus giving it a competitive advantage in marketplace and also reduce the risk related to acquiring raw materials and delivering goods and services to their customers (Stadtler 2015). Supply chain management is thus essential for an organization to offer high-quality services to their esteemed customers that are always the priority of any business that enables them compete in the global market and the networked economy. For an effective supply chain management, there must be a synchronization of activities such as manufacturing, inventory activities, storage activities, supplier activities, transportation, customer service and retailers’ activities. The synchronization plays a major role in delivering goods and services to the end users at the accurate time. The main advantages accrued from implementation of supply chain management include; enhanced supplier collaboration, improved customer relation services, improved inventory management, reduced warehouse and transport costs, enhanced delivery services and reduced delays, improved service and product quality, and reduced direct and indirect labor costs among other benefits that might enhance business operations (Rushton 2014).
An effective and responsible supply chain management is able to ensure that the quality of products and services are of the best standards and also promoted the development of products that are more sustainable in terms or resources utilization and environmental friendliness (Fawcett 2008). High-quality services mean the business will be able to attract more customers into purchasing the products and also enhance loyalty from the customers. Therefore, the business will be able to compete with other business in the same marketplace since their products are higher quality and also selling at fair prices. Under logistics, the implementation of the supply chain management system will enhance logistics technology by ensuring that materials, products and shipments are tracked both on the supply and delivery sides of operations of the business. This will enable faster delivery of goods and services to the customers in a more reliable manner. Also, use of supply management system in an organization will enable real-time visibility of possible problems and ensures quick diagnosis by the business in order to come up with a faster solution thus ensuring maintenance of customer satisfaction (Stadtler 2015).
Dialog and cooperation to improve the performance of CSR will fortify relations with suppliers and can also result in increased productivity of the business and reducing costs (Waters 2014). For instance, having the capacity to precisely know the operations undertaken by your distributors and suppliers at all times will ensure improved business operations in the management is able to know what action to take under a certain situation with respect to what the business suppliers and distributors are doing. Supply chain management systems make all these possible by acting as a bridge between the gaps between several business system software that are remotely located in order to enhance vividly cooperation among the business supply chain partners. Supply chain management system enables all its participants to share dynamically important information for example forecasts, demand trend reports, inventory levels, transport plans, and order status in a real-time manner (Coyle 2012). This form of undisturbed and instantaneous data sharing and communication in business will make sure that all the participants are updated so as for the business supply chain process to run as smoothly as possible.
Traditionally, the logistics supply chain has been known to experience quite a number of delay incidences particularly those that have not been enhanced with supply management systems (Fawcett 2008). Some of the delays that such as late shipments from vendors, logistic errors in channels of distribution and hold-ups on production lines majorly adversely impact the company’s ability to attain customer satisfaction in terms their demand for goods and services. It results in poor relations with the customers and even the collapse of the business since customer loyalty if lost which leads to reduced competitive advantage of the business. With the use of supply chain management system, all the problems with delays and poor delivery services due to late shipments are mitigated. That is, all the activities involved in the supply chain are flawlessly coordinated and executed from the preliminary stage to the finishing stage thus warranting higher levels of on-time deliveries to the end users and other location (Waters 2014).
Utilizing supply chain management in logistics technology will ensure reduction of cost of shipment by providing increased visibility into available options for multimodal shipment. Implementation of the supply chain management system will enhance adequate visibility into logistics operations, for instance, it will shade more light on the fact that shipping by sea is often more cost effective than shipping by air. Therefore, the supply chain management system will offer various modal options to be evaluated thus reducing the overall shipping cost of the company (Fawcett 2008). Also, supply chain management system can ensure reduction of overhead expenses in various different ways which include;
Other benefits accrued from implementing supply chain management in an organization are tracking and monitoring of compliance in areas of health, environment and safety. Also, it enables improved supply chain networks and tracking the status of activities that are mission-critical at all times to respond to arising problems before they reach unmanageable levels.
In conclusion, it is quite clear that implementation of supply chain management program in a logistics company will to greater heights boost the effectiveness of the activities of the business. Also, it is going to reduce the overhead cost incurred by the business thus enabling them produce high-quality products at a lower and fair prices hence increasing their competitive advantage. Also, problems associated with the delivery of goods and services to the end users are mitigated when supply chain management is implemented in an organization (Waters 2014).
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