Want to optimize delivery times? Reduce operating costs? Increase customer satisfaction and become a reference in your niche? You need to manage your supply chain effectively!
In this article, see what the supply chain is about, which areas are involved in the supply chain, and how you can manage it in just a few steps. Keep reading!
What is a supply chain?
The supply chain is nothing more than the set of steps involved in the flow of products, from purchasing from the supplier to delivery to the customer.
Every company has its own supply chain. The difference between one supply chain and another is the number of steps that make up the product flow. An industrial company, for example, usually has a longer chain than an e-commerce operation because it also handles the production stage.
Amazon, Unilever, Natura, Netshoes, and Walmart are model brands when it comes to supply chain. They have been in the market for years, offer a huge list of catalog options, and still manage to keep up with the volume of orders and customers.
What is the goal of the supply chain?
The main goal of the supply chain is to optimize the flow of materials, information, and resources along the entire chain.
Companies that aim to deliver more value to customers and build loyalty need to manage the supply chain as efficiently as possible, because it is through this practice that they will be able to:
Identify operational bottlenecks;
Improve operational efficiency;
Reduce costs and waste;
Anticipate demand.
Which areas are involved in the supply chain
The supply chain involves several areas within the company. Each one plays a fundamental role in coordinating and controlling the flows of materials or information. This means that if communication breaks down between two or more of these areas, all the other departments will be affected in some way.
The purchasing department, for example, is responsible for building a solid relationship with suppliers, negotiating contracts, and ensuring the availability of materials and raw materials for production.
The production department, in turn, is in charge of transforming these raw materials into high-quality finished products. Logistics and distribution, on the other hand, are responsible for planning and carrying out the transportation, storage, and delivery of products.
Customer service also plays a crucial role in the supply chain, because this department is responsible for keeping active contact with all customers and providing support.
READ MORE | Production planning and control (PCP): what it is and how to implement it in industry
Advantages of supply chain management
Managing the supply chain brings a series of advantages. The main ones are:
A holistic view of the business
By closely monitoring every step of product purchasing, production, storage, and distribution, managers can understand how their company works and better direct their strategic actions;
Cost reduction
Once smarter decisions are made to optimize internal processes, the company can reduce its inventory volume and even eliminate unnecessary activities;
Better product and service quality
By gaining a holistic view of the entire chain, the company can also identify where operational bottlenecks are concentrated and pinpoint improvements to its products and services;
Higher customer satisfaction
Once processes are optimized and the customer receives a quality product and service, they become a much more satisfied consumer and a brand advocate;
Demand forecasting
Control over every stage of the supply chain also lets managers identify more clearly which seasonal periods have higher and lower demand and, based on that information, strategically forecast all their purchases;
Increased competitiveness
By running more agile operations, reducing production costs, preparing inventory in advance to meet demand, and increasing customer satisfaction, the company expands its competitiveness, becoming a reference in the sector where it operates.
READ MORE | Why does industry need to invest in technology as soon as possible?
How to manage the supply chain effectively
Now that you know what a supply chain is and the advantages of managing it, here are the procedures needed to run effective management. Check them out!
Demand and supply planning
To ensure your company has items available at the right time, you will need to plan purchases, defining which products will be bought, in what quantities, and within what timeframes. Demand and supply planning must always be based on your own order history and sales projections.
Supplier selection and qualification
Once demand and supply planning is done, you will need to carry out a careful evaluation of your suppliers and potential new partners. Here you should consider criteria such as product quality, delivery capacity, competitive prices, and a reliable track record.
Inventory monitoring and control
These steps are fundamental to avoid shortages or product pileups on the shelves. If you run into difficulties and want to make record keeping and updating easier, we recommend technologies such as an ERP, an integrated management system designed to automate tasks and integrate departments.
Transportation and distribution
Establish strategies to guarantee on-time product delivery and minimize transportation costs. When defining these actions, consider factors such as distance, volume, urgency, and item characteristics. Also assess which routes are safest for drivers. Technologies such as transportation management and tracking systems can help at this stage.
Customer support
Even if the product was delivered correctly and on schedule, you will need to guarantee a post-sales experience so the customer stays loyal and becomes even more satisfied. So put together a good team to provide support and use different communication channels to streamline contact.
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Originally published in Portuguese at useall.com.br.