Supply chain management (SCM) ensures the efficient flow of goods, data, and finances, crucial for minimizing costs and enhancing productivity in a dynamic market
Supply chain management (SCM) is the process of overseeing the flow of goods, data, and finances as products move from their point of origin to the consumer. These processes are vital to your business’s success, as they help ensure that high-quality products are distributed in the right quantities to the appropriate locations. In the current ever-changing marketplace, businesses that succeed at SCM can proactively identify potential bottlenecks and cultivate fast, resilient supply chains while reducing costs and maintaining the highest efficiency standards.
Visibility is the key to effective SCM. When you can view the big picture and access granular insights about the state of your supply chain, you can make informed decisions that further your organizational goals and enhance the customer experience. Modern supply chain management systems give you real-time insights to help you coordinate the entire life cycle of a product, from raw materials to final delivery, by working closely with suppliers, intermediaries, and third-party service providers.
With the right solutions, SCM can drive real results across your business—helping you save money, gain efficiency, and improve customer service.
One common challenge manufacturers and distributors face is delays and cancellations. When shipments never arrive, production plans change or get put on hold, causing ripple effects throughout the enterprise.
These disruptions are far too complex for employees to track and resolve using spreadsheets. With SCM, you can see disruptions coming and adapt to them and adjust quickly.
Suppliers are a critical part of your business. SCM solutions give you a platform for continual communication and engagement, so you can exchange data and monitor progress.
With SCM, your business can choose the best shipping method for each order, negotiate the best rates with different carriers, and manage accounts receivable and accounts payable. The Building Blocks of SCM
Like any complex process, supply chain management is composed of several key steps:
Start by identifying the resources you’ll need to serve your customers, and then expand your focus to details like order quantity and frequency. Next, you’ll need to select suppliers that can reliably deliver your goods and services—during this phase, you’ll have to negotiate contracts, agree on purchasing order format, discuss repayment terms, and manage inventory levels.
While sourcing goods and raw materials from the other side of the globe can be a savvy cost-saving move, it also adds complexity to your supply chain. For example, obtaining bulk orders on short notice can be very difficult, while issues like geopolitical conflicts can make offshore sourcing challenging.
To counteract this, some businesses partner with near-shore supply and manufacturing partners. Although your entire sourcing network does not have to consist of local or semi-local businesses, as a manufacturer it’s a good idea to have a diverse group of trading partners for added flexibility.
Manufacturing is where the rubber meets the road. This stage focuses on producing products, testing them, packaging finished goods, and preparing them for delivery. To minimize waste and meet customer demand, it’s essential that your manufacturing processes are as efficient and lean as possible.
Resilience is key. Because off-shore manufacturers are susceptible to many of the same risks as off-shore suppliers, companies should develop a diverse network of manufacturing partners and stick to near-shore options wherever possible.
Delivery, also known as logistics, involves coordinating the receipt of orders from customers and efficiently fulfilling them, developing a network of warehouses, selecting carriers to transport products to customers, and setting up an invoicing system for payments.
Your products might also need to move the other way—managing returns (reverse logistics), is an equally crucial part of supply chain management, especially if you work in eCommerce. During this process, you’ll need to handle customer queries, deal with defective products, and oversee frictionless product exchanges, refunds, and returns.
Doing both deliveries and returns well builds customer loyalty and boosts the reputation of your brand. When you develop a strong following of loyal customers, you can keep the profits flowing and fuel the growth of your business.
Successful supply chain management has ripple effects throughout your business:
A well-managed supply chain can help you keep inventory and storage costs in check while maintaining adequate cash on hand to keep your business agile and moving forward.
The better your SCM processes, the greater your chances of exceeding customer expectations. When you deliver products on time and in pristine condition, you increase your standing as a dependable industry leader in a competitive field.
Excelling at SCM helps your business mitigate waste and recoup lost cash flow. Additionally, the right data lets you determine which trading partners are an asset to your business and which are falling short of your needs.
Sound SCM processes help you identify potential risks and develop nimble, data-driven strategies to manage them. Modern supply chain management systems include robust analytics and risk mitigation tools, enabling you to identify and adapt to business threats before they impact your bottom line.
Navigating the complexities of a dynamic supply chain management can be challenging, but you don’t have to do it alone. We’re ready to help you learn more about how Epicor SCM solutions can help your business scale and thrive. Let’s talk.
