5 Reasons to Care About Supply Chain Management
At its core, supply chain management is about managing the flow of goods and services. But it’s so much more than that. A well-run supply chain keeps a company competitive and increases customer satisfaction.
It’s a complex system with many moving parts, but understanding the five main components of the supply chain is a good place to start: planning, sourcing raw materials, manufacturing, delivery, and returns. When these pieces are finely tuned, you can avoid downsides like supply chain bottlenecks and limited inventory.
Improving customer satisfaction
When customers can rely on you to deliver a product or service on time and as promised, they’re much more likely to be satisfied with their purchase—and they’re also more likely to come back for more.
In fact, according to a study by Zendesk, companies with a high-level customer experience grew their customer bases by 3.1 times in 6 months more than companies with low levels. A well-managed supply chain eliminates hiccups that can cause late or incomplete orders, resulting in improved customer satisfaction rates.
Increasing efficiency and productivity
An efficient supply chain is the key to lean, mean companies. By reducing waste at every stage of production—from sourcing raw materials to manufacturing products to delivering them to customers—these businesses are able to operate more efficiently and productively. As a result, they enjoy increased profits and a competitive edge over their less-organized counterparts.
So how can you get your supply chain in shape? It all starts with streamlining your processes and evaluating your current system for opportunities to cut out waste. Are there any steps you can eliminate altogether? Can any tasks be automated or outsourced?
Once you’ve identified areas of potential improvement, it’s time to start making changes. Implementing even small changes can have a big impact on your company’s bottom line—so it’s well worth the effort.
Reducing Operational Costs
The benefits of an efficient supply chain extend beyond increased productivity; they also include reduced costs. When your company is able to source raw materials at lower prices, manufacture products more quickly and cheaply, and deliver orders on time (thus avoiding costly rush fees), your bottom line will thank you.
In fact, a McKinsey study found that reducing supply chain costs by just 2% can increase profits by up to 8%. That’s a huge margin, especially for enterprise companies.
Gaining a greater competitive advantage
Having a strong supply chain is critical to gaining a greater competitive edge in today’s business world. If you are able to streamline your operations and increase your efficiency, you will be able to get your products or services to market faster than your competitors. This will allow you to offer lower prices or better quality, which will make you even more competitive.
What’s more, being efficient in your operations will help you save money, which can be reinvested in other areas of the business or passed on to customers in the form of lower prices. Therefore, increasing your supply chain efficiency should be a top priority if you want to stay ahead of the competition. Digital transformation plays a large role in this effort.
Improving sustainability practices
As consumers become increasingly interested in sustainable business practices, it’s important for companies to take steps to reduce their environmental impact—and believe it or not, supply chain management can help with that too.
By working with eco-friendly suppliers and using sustainable transportation methods (like rail instead of air), companies can make their operations more environmentally friendly—and appeal to eco-conscious consumers in the process.
Supply chain management is the process of planning, executing, and monitoring the movement of goods and resources from suppliers to the end customer. In today’s global economy, supply chains are becoming increasingly complex, making it more important than ever for businesses to have a clear understanding of their supply side operations.
If you’re looking for a modern, cloud-native solution to help you process all the documents within your supply chain quickly, efficiently, and accurately, Rossum is the answer. Our technology is designed to read and understand documents of all types—from invoices and purchase orders to packing slips and bills of lading.
This means that you can spend less time manually processing documents, and more time on strategic tasks that will help grow your business. In addition, our platform is constantly learning and evolving, so you can be confident that you’re always getting the most up-to-date and accurate document processing possible.
Contact us today to learn more about how Rossum can help you streamline your supply chain management.