Today in this guide we will see the importance of supply chain management. It is very well known that for most businesses supply chain management is an integral part of the businesses and it is one of the most important parts of any company’s success and for customer satisfaction. One of the most important works of a supply chain experts is that of boosting customer service. Customers are the ones who expect the right product assortment and quantity that is needed to be delivered. Besides that, customers expect that the products will be available at the right place or location. If suppose, you have a car and if your auto repair shop does not have the needed parts in the stock and cannot fix your car, then its obvious customer satisfaction diminishes.

Timely Delivery – 

Right time delivery is another important factor to consider. Customers expect that their products should be delivered on time. Suppose, your pizza delivery guy comes 2 hours late or the Christmas presents are delivered after 25th then the customer satisfaction diminishes. Also, right after-sales support is one more factor to be considered in this area. A customer expects that his products will be serviced quickly. Supply chains help in reducing operating costs. Like decrease in the purchasing cost. Here retailers depend on the supply chain to do a speedy delivery of expensive products to avert holding costly inventories in stores for longer than needed. For instance, to avoid high inventory costs, the electronics store requires quick delivery of 60” flat plasma TVs.

Production Cost Decrease – 

Then, manufacturers depend on the supply chain experts to deliver materials reliably to assembly plants to avert material shortages that would shut down the production. So, here decrease in the production cost is another factor. Also, a decrease in the total supply chain cost is one more factor in which retailers and manufacturers depend or rely on the supply chain managers to create networks that meet the goals of the customer service at least total cost. If the supply chain is efficacious then it allows a firm to become more competitive in the marketplace. Another factor to consider is the enhanced financial position. In that, profit leverage is increased – Here supply chain managers are valued by the firms because only they help in controlling and reducing the supply chain costs. So, this results in a dramatic increase in the profits of the firm.

Decrease in Fixed Assets and Increase in Cash Flow – 

Next, there is a decrease in the fixed assets – Also one of the reasons why many firms value the supply chain managers is because they decrease the use of huge fixed assets like warehouses, plants, and vehicles, in the area of the supply chain. If the supply chain managers or experts can recreate the network to aptly serve the customers of the US from six warehouses rather than 10, then the firm will avert building 4 very expensive buildings. An increase in cash flow is one more factor – here the firms value supply chain experts because they help in speeding up the flow of the products to the customers. For instance – if a company can make and deliver the products to the customer in 10 days, rather than 70 days, then it can invoice the customer 60 days sooner.

Clare Louise