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The critical role of Supply Chain Management

Posted on February 12th, 2020

The success of your business links inextricably to the performance of your supply chain. If you want business success you have to make your supply chain successful too.

Supply Chain Managers direct an organization’s overall supply chain operations, including purchasing and inventory of raw materials, selection of vendors, and distribution of finished goods. They also evaluate past performance data to forecast needs and production scheduling. Their goal is to improve the efficiency of plants, warehouses, and transportation vehicles in a supply chain.

Supply Chain Managers help control and reduce supply chain costs. This can result in dramatic increases in a company’s profits and increases cash flow. Cash flow is directly increased because the delivery of a product is in a timely manner, and consumers can purchase their goods.

Several goals that are within supply chain management include the design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value. Also maximizing customer value, improving quality among products, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally. Other areas of responsibility are operations, logistics, procurement, and information technology. With all this in mind, it is not surprising that 69 percent of Supply Chain Managers come from, logistics, procurement, and production.

If companies use Strategic Supply Chain Management, the organization is more able to function at optimal capacity to provide and distribute various products and materials then companies that do not. It is no wonder that 79% of companies with high-performing supply chains achieve revenue growth superior to the average within their industries.

Supply chain management also plays a critical role in society. It can be used to support medical missions, conduct disaster relief operations, and handle other types of emergencies. Whether dealing with day-to-day product flows or dealing with an unexpected natural disaster, supply chain experts roll up their sleeves and get busy. They diagnose problems, creatively work around disruptions, and figure out how to move essential products to people in need as efficiently as possible.

There is no overstating the importance of superior Supply Chain Management.