It is vital to have an efficient and effective supply chain in order to minimise cost, waste and time. To achieve this, defining clear and actionable supply chain objectives is important. These objectives of supply chain management (SCM) not only offer a framework to align your supply chain strategy with your overall business goals, but also ensure that all stakeholders work towards a common goal. Read ahead to know more.
What Do You Mean by Supply Chain Management?
The supply chain involves a complex network of suppliers, distributors, manufacturers, retailers, wholesalers and customers. And, optimising this network is necessary for effective SCM. This includes obtaining the raw material, manufacturing the product, storing it and transporting it to customers. Also, it requires coordination amongst external partners, as well as internal resources and operations management.
Simply put, supply chain management involves managing the movement of products and services across different processes and locations. This also answers the popular question, “What do you mean by supply chain management?”
Notably, effective supply chain management not only impacts profitability, but also allows businesses to gain a competitive advantage. As per a study, organisations with advanced SCM capabilities were found to be 23% more profitable than their counterparts.
Further, supply chain management helps anticipate and mitigate risks, and track compliance with regulations and standards. Moreover, supply chain management can enhance customer satisfaction by ensuring the on-time arrival of products and that too in a good condition.
Objectives of Supply Chain Management
SCM objectives need to be specific, measurable, achievable, relevant, and time-bound. Here are the objectives of supply chain management:
- Enhancing efficiency to minimise waste is a critical component of SCM. Waste reduction can be achieved by managing manufacturing, inventory, transportation, and logistics.
- Improving product quality is another key objective of SCM. This involves adherence to various customer-specified quality attributes and government regulations, and the demonstration of ethical and sustainable practices. Also, this involves establishing precise standards and being agile in managing change.
- The optimisation of transportation and logistics is well taken care of by supply chain management practices. SCM not only ensures that business processes flow smoothly, but also works to make sure that suppliers, wholesalers, manufacturers, and retailers are on the same page.
- SCM practices also aim at reducing business expenses, including the cost of purchasing, manufacturing, and delivering goods. And, this can be achieved by optimising the supply chain to shorten the holding period and smoothen the flow of raw materials and finished goods.
- One of the important objectives of supply chain management is to maximise customer satisfaction. An efficient supply chain can enable a business to outperform its competition in terms of retail pricing. Also, having high-performing operations can help improve product delivery. Choosing the appropriate systems and methodologies, and selecting the right partners can offer the exceptional service that customers demand.
- Streamlining the distribution process is important to reduce overhead costs while also delivering items more quickly. Additionally, it is a good idea to invest in effective technology that helps manage inventory quickly, automate delivery, provide real-time tracking, and generate thorough reports.
- Supply chain management facilitates information sharing between all stakeholders. This contributes to developing an organisation with exceptional coordination.
Scope of Supply Chain Management
The scope of SCM or related opportunities in the future will be shaped by trends like data analytics, digitalisation, blockchain, artificial intelligence, sustainability, and risk management. To be successful in the evolving supply chain landscape, it is important to possess skills like technical knowledge, strategic thinking, adaptability, and an understanding of global market dynamics.
Conclusion
In order to create a roadmap for success, it is vital to define the objectives of supply chain management. Also, aligning these objectives with your business goals can not only help achieve operational excellence, but also deliver value to customers.
If you are interested in pursuing a career in this domain, then enrol in a reputable course like Advanced Certificate In Supply Chain and Analytics, CEC, IIT Roorkee. Connect with Imarticus Learning to know more!
