February 3, 2023

4 Elements for More Effective Supply Chain Management

A business depends on a good supply chain management system to know how much of something to buy and when it will be needed. It also says how many finished goods must be made and when they must be sent to customers.

Having a good supply chain management system is becoming more and more important because it can make your business run better and more cost-effective. And to do that, you need to know the four key parts of the supply chain that can make your business more profitable: integration, operations, purchasing, and distribution.

We’ll talk about each of these four things in this post.

But before we do that, make sure you’ve also joined the scmguide telegram channel so you can keep up with the latest blog posts and learn more about supply chain management.

Now, let’s talk about what each part means one by one.

4 elements for successful supply chain management

Let’s find out what I mean by the four supply chain elements I mentioned above without wasting time.

Integration

When I say “integration,” I mean that all parts of your organization work together.

Errors in supply chain operations are less likely to happen when all of the functions are working together. And that means your business will save money if you make sure it runs as cost-effectively as possible.

Integration means that all functions that work together work as a single team. There isn’t a single function that works on its own, let alone the other way around.

By making everything part of a single process that is linked to each other, you will find it easier to keep track of how the whole operation is going. So, you’ll also find it easier to see if there are any bottlenecks or processes you can improve.

Operation

Operations make up the second part of the supply chain.

When operations are run well, every job will be done the same way every time. But you still have to check on the work on a regular basis, whether that’s every day, every week, every month, or whenever you need to.

Check how well and efficiently your operations are working on a regular basis.

Improve everything that can still be improved, like how well the equipment works or how much work each person can do.

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Procurement

It’s important that your procurement team knows and understands how everything in your supply chain works. And part of their job is to figure out what materials, tools, or equipment they need to buy to keep the business running.

To have a strong supply chain operation as a whole, the procurement team needs to know and understand how to manage inventory. The team will make sure that there are never too many or too few of the things that are needed. Just right for what is needed. Because you know exactly what will happen if there is too much or too little of something. It will be terrible for the business.

Distribution

Customers can pick up the items they’ve ordered from either your store or your warehouse. And when it gets to that point, you can say that the supply chain is over.

4 elements for more effective supply chain management

Customers will get the goods they ordered on time, in the right amount, and in good condition if the distribution plan is good.

You can use reliable distribution software or hire a third-party logistics (3PL) company to handle the distribution so you can focus more on your main business.

Conclusion

If you know how the four supply chain elements listed above work, you can improve the company’s supply chain as a whole. Your supply of products will be enough to meet demand, so you won’t have shortages or too much stock.

When there are problems in your main business, it can be hard to keep track of everything in the supply chain.

In this case, you may choose to outsource part of your operation to the 3PL so that you can focus on solving the current problem.

In the long run, it will make your customers happier and help your business grow.

Hope it helps!

If you think this article is helpful, share it with your coworkers so they can get the same benefits. You can also join the scmguide telegram channel to find out about the latest blog posts and learn more about supply chain management. You can use any of the articles on this blog for any reason, even for profit, without giving credit to the author.

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Dicky Saputra

16+ years of experience in supply chain management. I help companies improve their end to end supply chain performance.

View all posts by Dicky Saputra →
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