Supply Chain Management, also popularly known as SCM, is a well known business strategy practiced by many successful organizations all over the globe in this competitive world. It involves planning, design, implementation and control of various business processes across organizational boundaries in an endeavor to deliver greater value to customers at minimum cost to the company. To put it simply, it is a practice where an organization works with its supplier companies to make sure that the customer gets the best product or service.
Movement of materials, information and funds would be smooth across the supply chain post successful implementation of SCM strategy.
Successful companies like IBM, GE, etc have effectively implemented SCM and are realizing its positive impact on their profits.
Tips for effective supply chain management:
Here are some useful tips on effective supply chain management:
Understanding various processes: Most of the businesses are operating without clear understanding of how things are working. There should be a clear mapping of various processes starting from purchase of raw materials to selling of finished products. This is a necessary for SCM initiative to be successful.
Use of SCM software: Investment in a good software goes a long way in the success of SCM. There are many SCM softwares available in the market by various reputed brands like SAP and Oracle.
Be “In touch” with the supplier companies: For the success of SCM initiative it is necessary that you are aware as to what is happening at the supplier organization. Surprise visit is a good idea. It is also important that the suppliers are convinced on how successful implementation will have a positive impact on profits. Training sessions will help.
Maintain dashboards: Information such as current inventory, etc should be visible. Dashboards will definitely help.
Listen to the supplier companies: It is very important that you listen to your supplier companies. They may give you many ideas on how to make the supply chain more efficient. Periodical brain storming sessions involving all parties would be a good idea.
Simplify and minimize documentation: Documentation is inevitable, however much people may desist it. Ensure that it is simple.
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