Supply Chain Management (SCM) is the system that connects and integrates the links of logistics management, sourcing, procurement, and conversion of any business. By integrating critical business functions -- you can raise profits, reduce risks, optimize costs, and understand how to manage the intricate business systems. Managing everything has a positive impact on any business, as it can make your customer and business happy by keeping the performance high.
Happy customer = Happy Business = Higher Performance
No matter the size of the business, all successful companies endure SCM as an essential part of their company or organization. Supply management is the conduit whence all inventories flow. Within this journey, it’s ensured to maximize the customer value and also maintain/achieve a sustainable competitive advantage.
SCM, under its umbrella, covers areas such as planning, design, execution, and control of business operations. Businesses can analyze supply chain activities to create net value, sustaining a competitive advantage, leveraging global logistics, and many more. Overall, there’s no reason to believe that supply chain management is not essential to any company or operation.
Note: According to a McKinsey report, the logistics sector in India comprises 14% of GDP, which is much higher from 8-9% of countries like Europe or the US.
Importance of Supply Chain Management
The main reasons for the importance of supply chain management include the following:
Implementing and optimizing a supply chain can undoubtedly transform a number of struggling processes in any supply chain. Also, leveraging technology, data visibility, and proper demand planning can help turn a failing supply chain around and keep it competitive.