From a supplier’s product or service to a consumer, the supply chain involves a series of transformations, including the organizations, people, activities, information, and resources. A supply chain shows the dynamic supply and demand networks of the production of any material to be marketed – from natural resources, raw materials, and other components to form a finished product.
The effective management of supply chains benefits the entire operations of a company, especially on its reputation and stability. And supply chain management solutions can be leveraged from one single application of NetSuite manufacturing, distribution, and supply chain management capabilities.
What Does Supply Chain Management Target?
Supply chain management (SCM) refers to the process of sourcing raw materials, creating products or services, and delivering them to the rightful customers. Leveraging SCM software boosts supply chain performance and coordinates the activities of the enterprise, which then leads to efficient operations.
SCM manages a company’s demand and supply network through accurate and timely information. The efficient management of market demands allows manufacturers to deliver only the right amount of salable products. And as a result, SCM helps both the manufacturers and retailers in reducing excess inventory for cost-effective processes.
Having a company’s planned out supply chain prevents conflicts in any step of the chain, including procurement and manufacturing, shipping and receiving, distribution, and reverse logistics. The smooth implementation of such processes leads to optimum financial gains of the business.
The Components of SCM
Effective planning and managing of resources are crucial in achieving the goals of the supply chain. The initial assessment of the demand of the customers for products and services would map the targeted supply chain. And the set metrics would evaluate the progress of the enterprise. In addition to planning, the information required for every step of the chain should also be monitored.
The company sources goods and services for production then. Professional relationships with suppliers are maintained and monitored to continue operations like ordering, receiving, managing inventory, and authorizing payments. And then, the acceptance of raw materials, manufacturing of products, testing for quality, and the like, are done next. Supply chain managers are responsible for the direct monitoring of activities in the supply chain.
The logistics part of the supply chain management composes of coordination of customer orders coordination, delivery scheduling, invoicing customers, and receiving payments. Some companies outsource this component from a third party, especially if the product requires specific handling. If the products delivered are defective or unwanted, the supplier returns the products to the warehouse.
The Importance of SCM
The capability of a company in executing effective supply chains can identify potential problems that may arise and generates satisfied customers upon receiving the products or services. The price will also be optimized by meeting the demand of the customers and manufacturing only those that may have booming potential in the market. Not just that, supply chain management improves the allocation of resources, and plan the work planning based on sales forecast, actual orders, and expected delivery of raw materials.
The supply chain gives an image of the whole business provided for the customers and consumers. So, they need to achieve an efficient supply chain management. Something ideal like this can be achievable through collaborations between the organizations involved, and the strengthening of participation with cloud-based NetSuite commerce networks for bolstering analytics capabilities.
