Experts predict the global supply chain management industry will be worth over USD 30 billion by 2026. There is clearly a huge demand for these services and this figure could grow exponentially for many years to come.

But, what is supply chain management (SCM) and how can it benefit your business? In essence, supply chain management refers to the process companies use to make their supply systems as efficient and cost-effective as possible. While this can be a complex area, it can be broken down into five key components that you can use to streamline your business’s supply chains for optimal results.

Read on to learn more about the five crucial aspects of supply chain management.

Plan

The first step is anticipating the needs of your customers, and ensuring there are processes in place to meet their demands. This can involve the use of past ordering data, the anticipation of future trends, and estimating your supply capacity. While not an exact science, this is a crucial element of supply chain management.

Source

Sourcing is not only about identifying suppliers, it is also about building relationships. When you are experiencing busy periods, you need to be sure your suppliers can deliver the right amount of goods on time. If you have a strong business bond, they are more likely to prioritize your orders and ensure you are in a position to supply your clients. 

Make 

One of the most intensive steps in the supply chain management guide is manufacturing. This is where goods have to be made, tested, and packaged. If you discover product faults at this stage, it can lead to delays, leading to client dissatisfaction and reduced profits. 

However, if you can get this process right, you can streamline your workflows and keep your supply chain moving smoothly. 

Deliver 

The delivery stage is a logistical process. This involves getting your products into your customer’s hands. While this can be difficult when working with global suppliers, it can also set you apart from your rivals. When your clients see you have a top-class delivery service, they will be more inclined to order from you in the future.

Return

A crucial part of supply chain management strategies is managing returns. If you do not pay attention to this stage, your customers may become unhappy and cancel any future orders. But, if you handle this aspect professionally, clients will appreciate your after-sales care. 

Every Business Should Understand What Is Supply Chain Management (SCM)

Now that you know what is supply chain management (SCM), you may be able to identify areas where you could strengthen your supply chain. The planning stage is critical to your success, and it’s vital to ensure you have dependable suppliers. You should also ensure your manufacturing processes are efficient, and that your delivery partners are reliable. 

You could soon have an effective supply chain management system that keeps your costs to a minimum.

Before you rush off to analyze your supply chain, be sure to check out more great posts in our Business section before you go. 

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By SARAH

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