Supply chains keep goods moving across the globe. They connect the myriad processes that occur between manufacturing and the delivery of a final product to consumers. In other words, they’re both complex and absolutely vital to today’s globalized economic system.
Supply chain management (SCM) refers to the active planning and execution of the global supply chain’s many moving parts. In decades past, each section of the supply chain was considered a self-contained problem, but now, they’re all viewed as interconnected pieces of the same puzzle. SCM systems are designed to ensure that all the pieces fit together properly, so needless to say, they come with a ton of benefits.
1. Improved Efficiency
Today’s top SCM systems are designed with efficiency in mind. They allow businesses to accurately predict demand, disruptions, and fluctuating market trends, ensuring that they always have an adequate supply of goods for their customers without creating unnecessary and costly material waste.
2. Increased Data Visibility
Data analytics is the buzzword of the day across many industries, and supply chain management is no exception. Today’s SCM systems include features that offer unprecedented access to data and information, giving a company’s decision-makers the tools they need to identify underperforming areas, anticipate future demand, and enhance financial planning processes.
3. Qualitative Improvements
Responsible management of complex supply chains improves the quality of the products and services offered to consumers. A well-functioning supply chain will have quality control guidelines and methods for documenting problems in place to help business owners ensure that they’re offering customers only the best products. This commitment to product quality can, in turn, help to increase brand loyalty and reduce the chances of a company facing unexpected liability issues.
4. Adherence to Global CSR Standards
Implementing an effective SCM system will help companies ensure compliance with globally recognized corporate social responsibility (CSR) standards. Adherence to these standards is more important than ever because today’s consumers expect the companies they rely on to sell them their goods to maintain socially and environmentally sustainable practices. Failure to follow international CSR standards can draw a lot of bad publicity, so it’s always best to ensure compliance by using an effective CSM system.
5. Reduce Delays
There has been a lot of attention given to supply chain delays during the ongoing coronavirus pandemic, and with good reason. Supply chain delays can drive up prices and leave consumers unable to find essential products. SCM systems help companies reduce delays, which can bolster their reputations in today’s trying economic times.
6. Improve Customer Retention Rates
Effective SCM systems make it easier to establish and maintain a strong reputation by quickly and efficiently responding to customer demands. These days, consumers will be happy to switch stores if they find one that is better able to keep the products they need the most in stock. For businesses that prioritize effective supply chain management and keep their shelves well-stocked even during difficult times, that creates a unique opportunity to convert more customers while simultaneously improving brand loyalty and retention rates.
Find the Right SCM Partner
Not all SCM systems are created equal, so it’s important for business owners to do their research and partner with a company that will provide reliable and flexible software or services. Look for cloud-based software that can be tailored to meet different companies’ unique organizational needs.