The Ultimate Guide to Modern Supply Chain Management

Supply chain management has become the battleground for customer loyalty. It is no surprise that the c-suite is paying more attention to streamlining these activities to ensure optimal efficiency and cost-effectiveness from start to finish, encompassing everything from production to product development, as well as the systems and processes utilized to direct these activities.

What Is Supply Chain Management?

• Supply chain management is a business function that involves the coordination of various actors including suppliers, manufacturers, distributors, retailers, and even customers to bring products from producers to consumers efficiently, sustainably, and profitably.
• Supply chains consist of a sequence of events related to buying a particular commodity or service by consumers from manufacturers or retailers through various distribution channels over time.
• Supply chain management in retail involves store planning and design, purchasing new stocks when old stocks has been depleted, and sales forecasting.
• In terms of customers, supply chain management includes activities such as keeping track of customer preferences and behavior and improving the logistics necessary to meet customers’ needs.

Supply chains consist of three main segments:

• Manufacturers and suppliers: Supply chains begin with manufacturing and selling products by manufacturers and suppliers. Supply chain activities in this segment include forecasting demand for their products, negotiating prices with buyers or retailers, deciding on what items should be produced or not, and ensuring the transport of goods from the factory to the customer.
• Retailers: Supply chains include all activities associated with selling products, including deciding on prices for their products, advertising and promoting the products, fulfilling customers’ orders, hosting online stores, etc. Supply chain management in this segment also entails managing stocks of products or raw materials to ensure that they have enough when a certain product is in high demand.
• Customers: Supply chains consist of a sequence of events related to buying a particular commodity or service by consumers from manufacturers or retailers through various distribution channels over time. Supply chain management in retail involves store planning and design, purchasing new stocks when old stocks has been depleted and sales forecasting. In terms of customers, supply chain management includes activities such as keeping track of customer preferences and behavior and improving the logistics necessary to meet customers’ needs. Supply chains involve a lot of different players and there is often potential for misalignment among them. Supply chain management is complicated by the fact that each player — manufacturers or suppliers, retailers, and customers — has its own goals which may not match up with those of other players in the supply chain.

There are several factors involved in supply chain management:

• Lowest overall costs: Supply chain management aims to make sure that processes throughout the supply chain are carried out as efficiently as possible to reduce costs while maintaining high-quality standards for end products. For example, manufacturers can reduce costs by outsourcing components of their products to more cost-efficient suppliers.
• Smooth delivery process: Supply chain management ensures that there is a smooth flow of inventory from one party in the supply chain to another, eliminating any bottlenecks. This helps the overall process run smoothly and makes sure customers get their orders on time.
• Reliable customer service: Supply chain management aims to ensure that customers are satisfied with the products they receive through a steady, uninterrupted supply of goods of high quality. It also involves taking care of any returns or exchanges required by customers, as well as being responsive to changes in customer preferences and requirements.
• Supply chain visibility: Supply chains involve a lot of different players and there is often potential for misalignment among them. Supply chain management is complicated by the fact that each player — manufacturers or suppliers, retailers, and customers — has its own goals which may not match up with those of other players in the supply chain. Supply chain visibility entails gaining a clear view of all activities taking place through the supply chain at any point in time to ensure that they are all aligned towards common goals and objectives.

Supply chain management for demand-driven market

When people talk about Supply Chain, what usually comes to mind is managing the flow of goods from manufacturers to retailers. However, with the growth in online marketplaces and retail networks, Supply Chain has evolved into a much more complex ecosystem where there are several other players involved. Supply chains for these marketplaces are not only fragmented but are also dynamic featuring multiple buyers. Buyers on demand-driven marketplaces come from all industries which means that supply can be sourced from anywhere in the world. Since buyers on such platforms often want products tailored to their needs i.e., customized, it becomes difficult to forecast their requirements accurately.

Long term trends contributing to Supply chain management for demand-driven market

• Digitalization & Globalisation & Collaboration between buyers and suppliers

As more and more products become digitized, Supply chains will keep evolving with the advent of new technologies. Digitization is also increasing transparency through advanced data sharing tools while reducing time delays in delivery processes. It is estimated that over 7 million jobs will be automated by 2020. Supply chains are expected to transform drastically with automation reshaping traditional business models, especially in manufacturing where tasks like production, packing, transport, etc., can be performed much faster and at a lower cost by automating them through robotics and machine learning. Supply Chain executives will need to embrace automation as it becomes an integral part of Supply chain management. Supply chains that are agile and able to adapt to the changing needs of buyers, as well as offer customized products to meet those needs, will remain competitive in today’s marketplace. Supply chain managers need to look for ways to improve efficiencies using new technologies like RFID tracking and GIS mapping systems along with predictive analytics and big data tools which allow them to gain valuable insights into customer behavior and emerging trends in the market.

• Advancements In Supply Chain Technology

In recent years, Supply chains have been going through major changes due to advancements made in logistics and Supply Chain Technology. Supply chains are not only becoming more complex and fragmented but also borderless thanks to the growth of eCommerce and its wide network of buyers and suppliers. Supply chain managers need to embrace digital Supply chain technology tools which help automate processes, enhance visibility, and support collaboration within their organizations as well as with third-party logistics service providers (3PLs).

• eCommerce Supply Chain Management

Supply chains for eCommerce marketplaces require advanced Supply chain management solutions that provide transparency into inventory levels, real-time product availability checking, intelligent routing and dispatching, shipment notifications to customers along with other features such as customer order management systems. Real-time collaboration between internal teams in addition to seamless integration with party logistics service providers is a must for Supply chains dealing with thousands of products, multiple warehouses, and fulfillment centers. Today Supply chains are becoming increasingly complex due to factors such as the Internet of Things, cloud computing, business mobility, globalization, Supply Chain automation, etc. Supply chain managers need to invest in Supply chain analytics tools to gain insights from data generated by these technologies along with Supply chain management software which can help plan demand for products better by leveraging information on sales trends across different regions and customer preferences.

• Collaboration With Third-Party Logistics Service Provider (3PLS)

Supply chains today are extremely dynamic involving frequent changes in the number of suppliers & buyers involved at any given time. This makes it difficult for senior executives to monitor performance issues continually affecting productivity and profitability. Supply chains adopting the collaborative model involving close coordination with 3PLs can achieve high levels of efficiency by routing orders through well-coordinated supply networks. More importantly, Supply chains can now focus on value-added activities without being bogged down by operational tasks thanks to this collaborative model. Collaboration also allows Supply chain managers to track inventory across warehouses or fulfillment centers in real-time thus eliminating instances where certain suppliers are unable to ship stock items due to lack of availability at partner facilities.

Today’s Reality of Supply chain management

In today’s Supply chain reality, Supply chains are becoming increasingly dynamic as Supply Chain managers need to enable flexible Supply chains that can meet the constantly changing demands of end-consumers. This requires Supply Chain executives to embrace process automation as a key element for successfully managing Supply chains to gain competitiveness and stay ahead.

Tomorrow’s Supply chain management

In the future, supply chain executives will need to invest in Supply chain planning tools that can help predict demand for products and plan inventory levels accordingly. Supply chains will also have to embrace Supply Chain analytics & optimization software that allows them to operate faster, better, and more efficiently to meet customer demands Supply Chain Management is a very broad topic with many aspects. The above article provides an excellent general definition of modern Supply Chain Management before going into details about eCommerce and 3PLs.  It also states the necessity of analytics tools and collaboration with 3PLs in certain situations which allow organizations to focus on value-added activities resulting from automation rather than being bogged down by operational tasks. This idea further reinforces how important Supply Chain Management is in today’s Supply Chain reality. If you are also looking for faster, scalable supply chain partners or manufacturer’s representation, or sourcing representation from India then you are at the right place. We are MV Synergy Solutions, Supply Chain Management, and Procurement Service Provider from India. We offer Supply chain services, Supply chain solutions & Supply chain consulting in India. Our Supply Chain consultants can help you to make your Supply Chain business model more efficient.