Running head: BUSINESS

Why supply management is critical

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Why supply management is critical?

What is Supply Chain Management

Supply Chain Management is an extremely detailed system used by small and large scale
industries in order to provide the products to their customers. From obtaining the raw materials
to the manufacturing and production to the final delivery of the product to the customers is all
done in a chain system. This management procedure is used not only to reduce cost in the budget
but also to create operational efficiencies within the organisation. This process is a part of the
entire ecosystem but modern supply change deals with the formulation of strategic alignments of
end-to-end business processes in order to determine the market and economic value of the
products and also give the company a competitive edge over their business competitors.

The advancement of digitalisation has shown the wholesale market the light of commerce. It
seems ancient history when the production and delivery processes required strenuous efforts,
involved a large amount of workforce, were disorganized and time-consuming. In recent times,
delivery takes hardly two weeks to a months time in order to get the products delivered. In some
metropolitan cities, it is just a matter of a few hours (van Hoek, Chatham & Wilding, 2002).
Automatic systems and lightning fast communications facilitated the way for supply
management and increased its productivity. A well-defined supply management chain makes the
operations fast and efficient.

Importance of supply chain management

Supply Chain Management has become an essential part of the large and small scale industries
nowadays. It plays a huge role in the company's success and customer satisfaction. Supply chain
management has an importance which includes:

Increase customer service

● Customers expect to receive the right product assortment and quantity.

● Customers also expect to receive the products on time.

● Customers expect the products to be delivered to the right location.

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● Customers expect the products to be serviced quickly after the follow-up

Reduce Operating Costs

● Decrease purchasing cost

Retailers are highly dependent in supply chains while delivering expensive products to the
customers. They generally tend to avoid keeping their products in the stores any longer than
necessary and want to deliver the items as quick as possible.

● Decrease Production Cost

Both manufactures and retailers are heavily dependent on the supply management chain in order
to plan out the management process which meets the customer service goals at minimum cost.
Any delay in production can cost the company a huge amount of money. From assembly of parts
to delivery of materials everyone avoids the costly delays of production. This is what makes
supply chain management more important.

Boost Financial Position

● Increase profit leverage

A company relies on the supply chain manager because they help regulate and minimize supply
chain costs. This can result in a massive increase in the company's profits.

● Decrease fixed assets

The company values the supply chain because the reduces the use of large fixed assets. Supply
chain essentially diminishes the cost of all these assets.

● Increase cash flow

The company value supply chain managers because they promote the product flow to the
customers and boost the cash flow in this process. Firms appreciate the added value supply chain
management.

Societal Value of Supply Chain Management

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Ensure Human Survival

● Helps sustain human life

Customers heavily depend on supply management chains in order to get their basic amenities
delivered like food and water. Any failure of such delivery pipelines can immediately threaten
human lives.

● Improves human healthcare

Customers depend on these supply chains in order to get the medicines and healthcare essentials
at their doorstep. During a medical crisis, these supply chain management can be a matter of life
and death.

● Climate Issues

Human beings depend on the energy supply chain for the supply of heat, light, refrigeration, and
air conditioning at home and at businesses. A logistical failure such as a power blackout can
immediately threaten human existence.

Enhance the quality of life

● Base for economic growth

Societies with a profoundly developed network of rails and roads including modern ports and
airports are able to deliver many goods to the customers at a lower cost and also quickly. This is
what makes the economy grow. The underdeveloped nations have really poor supply chain
infrastructure which pulls down the economic growth of the nation.

● Improve cost of living

Societies with a highly developed network of rails and roads including modern ports and airports
are able to deliver many goods to the customers at a lower cost and also quickly. This results in
the customer buying more affordable products with even their minimum income (Sangwan,
Choudhary & Batra, 2017). This increases the standard of living in humans which in turn
contributes to the rise of the standard of living in society.

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● Job creation

Supply chain professionals plan and operate all of the supply chains in society and manage the
tasks related to it. This results in many job prospects for humans in the supply chain field.

● Decreasing Pollution

Supply chain deliveries require the use of heavy transportation vehicles in order for packaging
and delivery processes. These activities result in the emission of a huge amount of waste. The
designers of supply chain management are responsible for the production of re eco-friendly and
sustainable infrastructure.

Development with Supply Chain

● Defense of freedom

Residents of a country are highly dependent on military logistics to defend their life from those
who are eager to end it. Military logisticians tactically locate aircraft, to providing proper
security. Supply chain management provides these devices necessary for the protection tasks to
the military.

The interconnected supply chain

Supply chain management is essential for the foundation of all societies. This takes an integrated
approach to management. Operating and co-operating and communicating in multiple locations
can make the supply chain more efficient.

Better supply chain better business

Supply chain management has a huge positive result on business. Good supply chain
management can improve customer service. The right set of products must be delivered on time
in order to avoid any conflict and displeasure among the customers and distributors. Consumers
also expect their products to be delivered to the location they have obtained for. Customers also
expect a high standard of customer support (Erridge & Murray, 1998).

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Supply chain management provides various techniques and tools required for the business
organization in order to detect the problems and provide the necessary solutions for it. It plays an
important role in transporting products more quickly to the desired destination. Supply chain
management helps the organization be more efficient and compete against their rivals.

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References

Erridge, A., & Murray, J. (1998). Lean Supply: a Strategy for Best Value in Local
Government Procurement?. Public Policy And Administration, 13(2), 70-85. doi:
10.1177/095207679801300206

Sangwan, K., Choudhary, K., & Batra, C. (2017). Environmental impact assessment of a
ceramic tile supply chain – a case study. International Journal Of Sustainable
Engineering, 11(3), 211-216. doi: 10.1080/19397038.2017.1394398

van Hoek, R., Chatham, R., & Wilding, R. (2002). Managers in supply chain management,
the critical dimension. Supply Chain Management: An International Journal, 7(3), 119-
125. doi: 10.1108/13598540210436568