Importance of Supply Chain Management

28 Sep 2018 18:48
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Supply chain management bridges the gap between the point of production and the point of consumption successfully. It aims at managing dynamic and intricate supply and demand network effectively. With using this service, companies can improve their business process by assembling sellers, human resources and their knowledge, technology, transportation and retailing systems; thereby turning procurement of products, their warehousing, transportation and distribution comfortable. While supply chain management involves all these services, logistics management takes care of the transportation of the resources up to their distribution.

Supply chain, in fact, dates back to the days when the 'barter system' was first introduced in the history of commerce. Dominance of disorderly services in those times could not make it as popular as it is these days. Management experts, now-a-days, have applied their experiences about logistics system into this segment, improved the infrastructure by applying the latest technologies to streamline the stream of services and expedited the speed of transportation with a variety of new-age vehicles with multiple of facilities including space and storage. Better transportation, better technologies, and better management services of these days have influenced the downstream and upstream of the system. Undeniably, a systematic, integrated and strategically coordinated management has made this possible.

Despite its widespread popularity, supply chain is most often confused with the term management when added to it. Without management, it denotes the ways of correlating with producers, wholesalers, distributors, retailers and consumers who are in a way or other interlinked through the flows of products. On the other hand, its management services act to link them by transporting or shipping the supplies to the points of demands, warehousing them, distributing them and conserving of them properly so that they are not damaged or decomposed. Sometimes, products are transferred from one point to another bypassing one or two supply chain points. But, this happens seldom as this gives rise to disorders in the chain-system.

Goal of Introducing Supply Chain Management: It strives consistently to lower costs and responsibilities. Consider a picture of trading where producers are transporting their products to their end-users directly. Now, imagine what Safety may gain and what disadvantages they may have to face. They may gain an enhanced and direct relationship with the end-users at the cost of extra expenses. But, businesses are not built upon the motto of building relationship at the cost of any extra expenses. The lower expenses a business can ensure the higher profits it can make. This management service has helped these business-links reduce expenses by ensuring smooth and speedy procurement, transportation, storage and distribution processes for the products.

Process of Cost Reduction: Expert executives in this field analyze the existing production and distribution methods to formulate cost-efficient ones. They try to come up with techniques that help them procure products at the lowest prices. Those executives share logistical experiences and information with those engaged in this field to ensure that all of the fellows have understood the benefits. Transporting products directly to the consumers involves several risks including damages and decomposition of the products besides higher expenses. But, while transporting those products through a managed logistic service via different points of networks; the safety of the products against damages, decomposition and the cost-reduction can be guaranteed. This uses long haul trucks with refrigeration system, enclosed flatbed vehicles, and different kinds of freight shipping services. With using them, transportation of products or consumables has become smooth, safe and speedy.

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