Boost Customer Service:
Customers anticipate receiving the correct product assortment and amount.
- Customers want things to be available when they need them. (For example, if an auto repair shop does not have the necessary components in stock and cannot restore your automobile for another day or two, customer happiness suffers).
- Appropriate Delivery Time — Customers expect things to be delivered on time (for example, if pizza is delivered two hours late or Christmas presents are delivered on December 26), customer satisfaction suffers.
- Customer service after the sale — Customers want things to be serviced immediately. (For example, when a house furnace breaks down in the cold and repairs take days, customer satisfaction suffers.)
Reduce Operating Costs:
Reduces Purchasing Costs – Retailers rely on supply networks to deliver pricey products fast in order to avoid keeping expensive inventory in stores for longer than required. To prevent high inventory expenses, electronics stores, for example, require quick delivery of 60″ flat-panel plasma HDTVs.
Reduces Production Costs – Manufacturers rely on supply chains to reliably deliver materials to assembly plants in order to minimise production shutdowns due to material shortages. A parts supply delay that causes an auto assembly plant stoppage, for example, can cost $20,000 per minute and millions of dollars in missed pay each day.
Manufacturers and retailers rely on supply chain managers to develop networks that meet customer service requirements at the lowest total cost. Supply chains that are efficient allow a company to be more competitive in the marketplace. Dell’s groundbreaking computer supply chain technique, for example, entailed building each computer to a specific customer order and then sending it directly to the customer. Dell avoided having big computer inventories languishing in warehouses and retail locations as a result, saving millions of dollars. Dell also avoided keeping computer stocks that would become obsolete as computer technology evolved quickly.
Improve Financial Position:
Supply chain managers are valued by businesses because they help regulate and reduce supply chain costs. This can lead to significant gains in company earnings. For example, because Americans consume 2.7 billion boxes of cereal each year, lowering cereal supply chain costs by only one cent per box would save the industry $13 million over five years as 13 billion boxes of cereal passed through the upgraded supply chain.
Decreases Fixed Assets – Firms value supply chain managers because they decrease the use of large fixed assets such as plants, warehouses and transportation vehicles in the supply chain. If supply chain experts can redesign the network to properly serve U.S. customers from six warehouses rather than ten, the firm will avoid building four very expensive buildings.
Firms value supply chain managers because they reduce the utilisation of big fixed assets in the supply chain, such as facilities, warehouses, and transportation vehicles. If supply chain experts can reorganise the network such that six warehouses instead of ten can properly serve US clients, the company will avoid having to build four very expensive buildings.
Supply chain management performs a lesser-known but crucial function in society. Medical missions, disaster relief operations, and other forms of situations can all benefit from SCM knowledge and capabilities.
Supply chain specialists pull up their sleeves and get to work, whether it’s dealing with day-to-day product flows or dealing with a natural disaster. They identify issues, devise inventive solutions to challenges, and find out ways to get critical supplies to people in need as quickly as feasible.
