Reduce Costs & Improve Finances - Businesses
can reduce costs at a variety of levels in the supply chain. Buying raw
materials in bulk could increase discounts while retaining fewer products in
warehouses and predicting consumer demand can decrease the likelihood of
holding onto expensive assets and paying to house their inventory. Eliminating
processes can reduce costs but also decrease delivery times and increase the
cash flow by minimizing the number of steps required to complete a full
transaction. Any expenses that a business avoids can increase profit without
increasing product prices and puts the organization at a competitive advantage
by allowing customers to get higher quality products faster.
Customer Service - As customers
expect faster delivery times and better products, it is essential for
businesses to meet those demands by ensuring their supply chain delivers the
correct products in the correct quantities. That means that products must be
readily available when and where they are needed. Customers also expect better
support after their purchase, requiring businesses to offer warranties and
repairs in a reasonable amount of time.
Sustainability & Corporate Responsibility - Businesses
can further utilize supply chains to encourage energy-efficient and sustainable
practices and processes by replacing steps that are wasteful and
energy-consuming. Not only do these responsible behaviors garner support from
eco-centric consumers, but it can also be cost-effective to avoid costly
packaging solutions that cause environmental pollution. Overall, supply chains
that use fewer resources are more sustainable and less expensive.
Facilitate Information Sharing & Respond To Market Uncertainty - Information sharing within a business provides much more efficient supply chains because there is more knowledge to make important decisions. Supply chain management that is based on complete knowledge creates opportunities to predict outcomes of business risks during uncertainty and better react to new changes as well, leading to advantageous competition and market development.
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